Environmental Policy Instruments: Technology Adoption Incentives with Imperfect Compliance
Environmental and Resource Economics , Volume 47 - Issue 2 p. 261- 274
We study the incentives to adopt advanced abatement technologies in the presence of imperfect compliance. Interestingly, incentives under emission taxes and pollution abatement subsidies are the same that in the perfect compliance scenario. However, under emission standards imperfect compliance can increase firms’ incentives to invest, whereas under an emission permit mechanism investment incentives decrease only if widespread non-compliance induces a reduction in the permit price. Our results are valid for fairly general characteristics of the monitoring and enforcement strategies commonly found in both, theoretical and empirical applications.
|Environmental and Resource Economics|
|Organisation||Department of Technology and Operations Management|
Arguedas, C., Camacho-Cuena, E., & Zofio Prieto, J.L. (2010). Environmental Policy Instruments: Technology Adoption Incentives with Imperfect Compliance. Environmental and Resource Economics, 47(2), 261–274. doi:10.1007/s10640-010-9375-4