Economics at your fingertips  

The Search for Abatement Technologies in the Alberta Oil Sands

Alain-Désiré Nimubona, Ujjayant Chakravorty and Andrew Leach ()

No 4781, CESifo Working Paper Series from CESifo

Abstract: We develop a three-stage model of abatement technology search, adoption, and deployment. Using this model, which draws on search theory tools more frequently used in labour and monetary economics, we compare market-based and command-and-control pollution control instruments with respect to the incentives each provides for abatement technology search and adoption, expected emissions reductions, and expected compliance costs. We motivate our work by examining firm-level decisions in the oil sands region of Alberta, Canada, where firms are developing new abatement technologies to reduce fluid tailings associated with mining operations. We show that the polluting firm always has more incentives to search for and adopt a more efficient abatement technology under either an emissions tax or a tradeable permit system than under an equivalently stringent emissions standard. We also show that while expected incentives for innovation are comparable under emissions taxes and tradeable permit regimes, the likelihood for total future compliance costs to be reduced after an increase in the stringency of environmental policy - the so-called Porter hypothesis - is higher with a tradeable permit regime.

Keywords: abatement technology; search; prices versus quantities; oil sands; Porter hypothesis (search for similar items in EconPapers)
JEL-codes: Q55 Q58 H23 D83 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in CESifo Working Paper Series from CESifo Contact information at EDIRC.
Bibliographic data for series maintained by Klaus Wohlrabe ().

Page updated 2020-10-14
Handle: RePEc:ces:ceswps:_4781