On Refunding of Emission Taxes and Technology Diffusion

Jessica Coria and Kristina Mohlin

No 573, Working Papers in Economics from University of Gothenburg, Department of Economics

Abstract: We analyze diffusion of an abatement technology in an imperfectly competitive industry under a standard emission tax compared to an emission tax which is refunded in proportion to output market share. The results indicate that refunding can speed up diffusion if firms do not strategically influence the size of the refund. If they do, it is ambiguous whether diffusion is slower or faster than under a non-refunded emission tax. Moreover, it is ambiguous whether refunding continues over time to provide larger incentives for technological upgrading than a non-refunded emission tax, since the effects of refunding dissipate as the overall industry becomes cleaner.

Keywords: emisson tax; refund; abatement technolgy; technology diffusion; imperfect competition (search for similar items in EconPapers)
JEL-codes: H23 O33 O38 Q52 (search for similar items in EconPapers)
Pages: 49 pages
Date: 2013-10-09
New Economics Papers: this item is included in nep-ene, nep-env and nep-pbe
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Citations: View citations in EconPapers (2)

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Journal Article: On Refunding of Emission Taxes and Technology Diffusion (2017)
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