Investment Policy for New Environmental Monitoring Technologies to Manage Stock Externalities

Katrin Eleonora Millock, Angels Xabadia () and David Zilberman ()
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Angels Xabadia: Department of Economics - University of Girona

Documents de travail du Centre d'Economie de la Sorbonne from Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne

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)
JEL-codes: D62 H23 L51 O33 Q58 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta and nep-env
Date: 2009-02

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ftp://mse.univ-paris1.fr/pub/mse/CES2009/09010.pdf (application/pdf)

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:mse:cesdoc:09010

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