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...

Many important environmental policies involve some combination of emission controls and ambient environmental quality standards, for instance SO2 emissions are capped under Title IV of the U.S. Clean Air Act Amendments while ambient SO2 concentrations are limited under National Ambient Air...