Adoption of a clean technology using a renewable energy

Slim Ben Youssef

MPRA Paper from University Library of Munich, Germany

Abstract: We consider a monopolistic firm producing a good while polluting and using a fossil energy. This firm can adopt a clean technology by incurring an investment cost decreasing exponentially with the adoption date. This clean technology does not pollute and has a lower production cost because it uses a renewable energy. We determine the optimal adoption date for the firm in the cases where it is regulated at each period of time and when it is not regulated. Interestingly, the regulated firm adopts the clean technology earlier than what is socially-optimal. However, the non-regulated firm adopts later than what is socially desired. The regulator can compensate the regulated firm for the loss incurred if he wants that it delays its adoption date to the socially-optimal one. Nevertheless, the regulator may be interested in letting the firm adopts earlier to encourage the diffusion of the use of green technologies in other industries.

Keywords: regulation; clean technology; renewable energy; adoption date. (search for similar items in EconPapers)
JEL-codes: D62 H57 Q42 Q55 (search for similar items in EconPapers)
Date: 2010-09
New Economics Papers: this item is included in nep-ene, nep-env and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/25576/1/MPRA_paper_25576.pdf original version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:25576

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().