 Taxes versus permits as incentive for the intertemporal supply of a clean technology by a monopolyResource and Energy Economics, 2014, vol. 36, issue 1, 248-269 Abstract: This paper investigates the intertemporal monopolistic supply of a clean technology and addresses the following questions: How does the lack of governments to commit restrict the incentives and thereby the supply of clean technologies? Are either emission taxes or emission permits better suited in such a dynamic setting? Although the monopoly can be forced to price taking behaviour, the inability of governments to commit leads to too slow and to too little expansion. Prices and quantities are equivalent for different kinds of government's objectives. An (important) exception is the case of non-competitive supply of the dirty input: taxes dominate from a welfare perspective however due to the additional scope to accrue rents and not due to an improvement of incentives for the development of clean technologies. Permits eliminate pollution entirely, which fosters the expansion of the clean technology. Keywords: Lack of commitment; Taxes versus permits; External costs; Non-competitive supply; Dynamic game (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:resene:v:36:y:2014:i:1:p:248-269 DOI: 10.1016/j.reseneeco.2013.05.005 Access Statistics for this article Resource and Energy Economics is currently edited by J. F. Shogren and S. Smulders More articles in Resource and Energy Economics from Elsevier |
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