Does more stringent environmental regulation induce or reduce technology adoption? When the rate of technology adoption is inverted U-shaped

Perino, Grischa and Requate, Till (2012) Does more stringent environmental regulation induce or reduce technology adoption? When the rate of technology adoption is inverted U-shaped Journal of Environmental Economics and Management, 64 (3). pp. 456-467.

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Abstract

We show that for a broad class of technologies the relationship between policy stringency and the rate of technology adoption is inverted U-shaped. This happens when the marginal abatement cost (MAC) curves of conventional and new technologies intersect, which invariably occurs when emissions are proportional to output and technological progress reduces emissions per output. This outcome does not result from policy failure. On the contrary, in social optimum, the relationship between the slope of the marginal damage curve and the rate of technology adoption is also inverted U-shaped. Under more general conditions, these curves can look even more complicated (e.g., such as inverted W-shaped). (C) 2012 Elsevier Inc. All rights reserved.

Document Type:	Article
Research affiliation:	Kiel University OceanRep > The Future Ocean - Cluster of Excellence Kiel University > Kiel Marine Science
Refereed:	Yes
ISSN:	0095-0696
Projects:	Future Ocean
Date Deposited:	14 May 2014 09:44
Last Modified:	14 May 2014 09:44
URI:	http://eprints.uni-kiel.de/id/eprint/24200

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