Investment Policy for New Environmental Monitoring Technologies to Manage Stock Externalities

Katrin Millock (), Angels Xabadia () and David Zilberman ()
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Katrin Millock: CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Panthéon-Sorbonne - Paris I, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris
Angels Xabadia: Department of Economics - University of Girona

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: With the development of modern information technologies, relying on nanotechnologies and remote sensing, a number of systems can be envisaged that allow for monitoring of the negative externalities generated by producers, consumers or travelers - road pricing schemes or individual emission meters for automobiles are two examples. In the paper, we analyze a dynamic model of stock pollution when the regulator has incomplete information on emissions generated by heterogeneous agent. The paper's contribution is to explicitly study a decentralized policy for adoption of monitoring equipment over time. Each agent has to choose between paying a fixed fee or installing monitoring technology and paying a tax on actual emissions. We determine the second-best tax rates, the pattern of monitoring technology adoption, and identify conditions for the voluntary diffusion of monitoring technologies over time.

Keywords: Externalities; environmental taxation; monitoring technology adoption; diffusion; nanotechnologies (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta and nep-env
Date: 2009-01
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Related works:
Working Paper: Investment Policy for New Environmental Monitoring Technologies to Manage Stock Externalities (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:hal:cesptp:halshs-00367888_v1

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