Policy choice for end-of-pipe abatement technology adoption under technological uncertainty

Bingxin Zeng, Lei Zhu and Xing Yao

Economic Modelling, 2020, vol. 87, issue C, 121-130

Abstract: Regulators have increasingly become concerned about end-of-pipe abatement technologies because they not only play a crucial role in air pollution control but also ensure the achievement of the deep carbon emissions reduction target. This paper investigates the effect of emission taxes and standards on the adoption of end-of-pipe abatement technology when the arrival time and degree of improvement of the new emissions abatement technology are uncertain. We find that the ranking of emission taxes and standards in terms of motivating early adoption depends on the policy stringency. More specifically, for high levels of environmental stringency, standards induce an earlier technology adoption than taxes, while the opposite conclusion holds for low levels of environmental stringency. The sensitivity analysis shows that these findings are robust to various relevant crucial parameters. Finally, the implications for the choice of environmental policy have been provided.

Keywords: Emission taxes; Emission standards; End-of-pipe abatement technology; Technological uncertainty (search for similar items in EconPapers)
JEL-codes: L51 O33 Q55 Q58 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:87:y:2020:i:c:p:121-130

DOI: 10.1016/j.econmod.2019.07.012

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