Environmental regulation, technological diversity, and the dynamics of technological change

Frank Krysiak ()

Journal of Economic Dynamics and Control, 2011, vol. 35, issue 4, 528-544

Abstract: Inducing technological progress is an important objective of environmental regulation. We investigate under which conditions regulation-induced technological progress pursues the best technological option. We analyze a setting with vertical and horizontal technological progress, cost uncertainty, time-limited patent protection, and a case that is typical for some emissi4on-intensive industries, like electricity generation or the chemical industry. Under taxes and standards, only the current least-cost technology is used and developed, implying a lock-in into a possibly inferior technology. Tradable permits yield slower progress but can facilitate the simultaneous development of technologies, rendering lock-ins less likely.

Keywords: Technological; change; Regulation; R&D; Technological; diversity; Uncertainty; Investment (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (31)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:dyncon:v:35:y:2011:i:4:p:528-544

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