We investigate the interplay between environmental policy, incentives to adoptnew technology, and repercussions on R&D. We study a model where a monopolistic upstream firm engages in R&D and sells advanced abatement technology to polluting downstream firms. We consider four different timing and...

This paper studies the socially optimal emission and commodity tax policy when consumers are willing to pay a price-premium for environmentally friendlier variants of a commodity vertically differentiated in environmental quality. The first-best levels of quality can be obtained by a combination...

Environmental problems with unknown emission abatement cost and damage are analyzed. The game under consideration is static, and its expected payoff structure displays a prisoners’ dilemma. Even in this most unfavorable setting cooperation might arise if the involved countries are sufficiently...