In the longer run, effects on R&D and the implementation of advanced abatement technology may be at least as important as short-run cost effectiveness when we evaluate public environmental policy. In this paper, we show that the number of firms that adopt advanced abatement technology could be...

There are many situations where environmental authorities use a mix of environmental policy instruments, rather than one single instrument, to address environmental concerns. For example, one instrument may be used to reduce overall emissions of a pollutant while another is used to address...

Regulators often seek to promote the use of improved, cleaner technology when new investments occur; however, technology mandates are suspected of raising costs and delaying investment. We examine investment choices for electricity generation under a strict emissions rate performance standard...

This paper shows that tradable emissions permits and an emissions tax have a risk-related technology choice effect. We first examine the first- and second-order moments in the probability distributions of optimal abatement and production under the two instruments. The two instruments will, in...

This paper shows that tradable emissions permits and an emissions tax affect the firms' technology choice differently under uncertainty. A tax encourages the most flexible technology if and only if stochastic costs and the equilibrium permit price have sufficiently strong positive covariance,...

There is a large number of regional agreements concerning Greenhouse Gas (GHG) emissions, often linked to other regional integration agreements. The most successful one in making effort in reducing carbon emissions is the Emission Trading System by the European Union (EU ETS). Apart from this...

The theoretical justification for a greenhouse gas (GHG) cap and trade system is that participants will trade emission permits until their marginal costs of abatement equal the equilibrium price of emission permits. Abatement is then globally cost efficient. We demonstrate, however, that when...

In this study, I analyze the role of environmental policies and energy cost savings in the switch to natural gas by stationary sources in Chile. According to the data, most of the switching was induced by the lower cost of natural gas, although environmental policies played a small role and...

This study looks at the effects of the choice between taxes and permits on the pattern of adoption of a new (pollution) emissions abatement technology. It uses a dynamic setting, where the regulator observes the arrival and initial use of the technology and determines the optimal ex-post amount...