A note on environmental R&D under time-consistent emission tax

In a recent publication in Journal of Economic Behavior and Organization, Poyago-Theotoky (2007) developed a three-stage game model, and also derived theoretical findings and important policy implications for environmental R&D under a time-consistent emission tax. Among the conclusions presented in that paper, it was stated that with inefficient environmental R&D technology and small environmental damage, cooperative environmental R&D engenders larger environmental R&D efforts and greater social welfare than noncooperative environmental R&D does. This note describes that the results of Professor Poyago-Theotoky's (2007, 2010) works are still robust in a relaxed wider parameter range of the environmental damage coefficient. Furthermore, we provide the generalized sufficient condition of damage coefficient to guarantee an interior solution for R&D in an extended framework.