Incentives for Environmental R&D

Mads Greaker and Michael Hoel (mihoel@econ.uio.no)

No 3468, CESifo Working Paper Series from CESifo

Abstract: Since governments can influence the demand for a new abatement technology through their environmental policy, they may be able to expropriate innovations in new abatement technology ex post. This suggests that incentives for environmental R&D may be lower than the incentives for market goods R&D. This in turn may be used as an argument for environmental R&D getting more public support than other R&D. In this paper we systematically compare the incentives for environmental R&D with the incentives for market goods R&D. We find that the relationship might be the opposite: When the innovator is able to commit to a licence fee before environmental policy is resolved, incentives are always higher for environmental R&D than for market goods R&D. When the government sets its policy before or simultaneously with the innovator’s choice of licence fee, incentives for environmental R&D may be higher or lower than for market goods R&D.

Keywords: R&D; environmental R&D; innovations; endogenous technological change (search for similar items in EconPapers)
JEL-codes: H23 O30 Q55 Q58 (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Working Paper: Incentives for environmental R&D (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_3468

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