 Emission taxation, green innovations and inverted-U aggregate R&D efforts in a linear state differential gameDavide Dragone, Luca Lambertini () and Arsen Palestini Research in Economics, 2022, vol. 76, issue 1, 62-68 Abstract: We revisit a well known differential Cournot game with polluting emissions, to propose a version of the model in which environmental taxation is levied on emissions rather than the environmental damage. This allows to attain strong time consistency under open-loop information, and yields two main results which can be summarized as follows: (i) to attain a fully green technology in steady state, the regulator may equivalently adopt an appropriate tax rate (for any given number of firms) or regulate market access (for any given tax rate); (ii) if the environmental damage depends on emissions only (i.e., not on industry output) then the aggregate green R&D effort takes an inverted-U shape, and the industry structure maximising aggregate green innovation also minimises individual and aggregate emissions. This calls for a coordination of environmental and merger regulation so as to create the industry structure most favourable to green innovation. Keywords: Pollution; Green R&D; Emission taxation; Differential games (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:76:y:2022:i:1:p:62-68 DOI: 10.1016/j.rie.2021.11.001 Access Statistics for this article Research in Economics is currently edited by Federico Etro More articles in Research in Economics from Elsevier |
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