Resource title

Pollution-Reducing and Resource-Saving Technological Progress

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Resource description

In this paper we survey the theoretical literature on both pollution-reducing and resource-saving technological progress. The literature can be divided into two strands. One strand deals with microeconomic models which investigate incentives to adopt and to develop environmentally more friendly technologies for different policy tools and in different economic environments, such as market structure or timing and commitment structures. It turns out that, firstly, price based instruments such as emission taxes and tradable permits perform better than command and control policies, and secondly, that under competitive conditions ex ante end ex post optimal policies are equivalent. Under imperfect market conditions the policy conclusions are more subtile. The second strand of literature deals with both pollution-reducing and resource-saving technological progress within endogenous growth models. Most of these models are characterized by three market imperfections : market power for new (intermediate) products, positive R&D spillovers, and pollution. These imperfections can be mitigated by subsidies on intermediate products, subsidies on R&D effort, and a tax on emissions. Moreover, in most models there occurs a trade-off between the speed of growth and environmental quality.

Resource author

Dagmar Nelissen, Till Requate

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/21983

Resource license

Adapt according to the presented license agreement and reference the original author.