Policy-Induced Technology Adoption: Evidence from the U.S. Lead Phasedown

Suzi Kerr and Richard Newell

No 10834, Discussion Papers from Resources for the Future

Abstract: The theory of environmental regulation suggests that economic instruments, such as taxes and tradable permits, create more effective technology adoption incentives than conventional regulatory standards. We explore this issue for an important industry undergoing technological responses to a dramatic decrease in allowed pollution levels - the petroleum industry's phasedown of lead in gasoline. Using a panel of refineries from 1971 to 1995, we provide some of the first direct evidence that alternative policies affect the pattern of adoption in expected ways. Importantly, we find that the tradable permit system used during the lead phasedown provided incentives for more efficient technology adoption decisions. Where environmentally appropriate, this suggests that flexible market-based regulation can achieve environmental goals while providing better incentives for technology diffusion.

Keywords: Research; and; Development/Tech; Change/Emerging; Technologies (search for similar items in EconPapers)
Pages: 40
Date: 2001
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Citations: View citations in EconPapers (5)

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Journal Article: Policy‐Induced Technology Adoption: Evidence from the U.S. Lead Phasedown (2003)
Working Paper: Policy-Induced Technology Adoption: Evidence from the U.S. Lead Phasedown (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:rffdps:10834

DOI: 10.22004/ag.econ.10834

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