Clean Technology Adoption Under Cournot Competition

María Eugenia Sanin Vázquez and Skerdilajda Zanaj

Strategic Behavior and the Environment, 2012, vol. 2, issue 2, 159-172

Abstract: In this paper we assess incentives for clean technology adoption by firms that compete a la Cournot in local product markets subject to a tradable emission permits regulation. Sanin and Zanaj (2011) show that permit prices may increase after clean technology adoption. Herein we show that, since strategic firms are able to predict such increase, this results in a non-innovation equilibrium (even for very low adoption costs). To the light of the previous result, we find a sufficient condition for the cap on emissions to ensure positive innovation incentives.

Keywords: Environmental innovation; Tradable emission permits; Interaction a la Cournot (search for similar items in EconPapers)
JEL-codes: D43 L13 Q55 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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Related works:
Working Paper: Environmental innovation under Cournot competition (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:now:jnlsbe:102.00000013

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