Conventional wisdom argues that environmental policy is less costly if environmental policy induces the development of cleaner technologies. In contrast to this argument, we show that the cost of environmental policy (a reduction in emissions) may be larger with induced technical change than...

Almost all empirical research that has attempted to assess the validity of the Porter Hypothesis has started from reduced-form models, e.g. by using single-equation models for estimating the contribution of environmental regulation (ER) to productivity. This paper addresses the Porter Hypothesis...

Uncertainty about long-term climate policy is a major driving force in the evolution of the carbon market price. Since this price enters the investment decision process of regulated firms, this uncertainty increases the cost of capital for investors and might deter investments into new...

Uncertainty about long-term climate policy is a major driving force in the evolution of the carbon market price. Since this price enters the investment decision process of regulated firms, this uncertainty increases the cost of capital for investors and might deter investments into new...

We investigate conditions that aggravate market failures in energy innovations, and suggest optimal policy instruments to address them. Using an intertemporal general equilibrium model we show that “small” market imperfections may trigger a several decades lasting dominance of an incumbent...

Empirical analyses of the determinants of environmental innovations were rarely able to distinguish between different areas of environmental impacts. The paper tries to close this gap by employing a new and unique dataset based on the German Community Innovation Survey conducted in 2009. The...

It has long been argued that the implementation of market-based environmental policy instruments such as environmentally-related taxes and tradable permits is likely to lead to greater technological innovation than more direct forms of regulation such as technology-based standards. One of the...

This paper aims to analyse the evolution of energy efficiency systems for the residential sector of EU countries over the past twenty years and the associated process of structural change occurred in EU economies. To this purpose, we develop a set of indicators to measure some significant...

Encouraging innovation is an important part of environmental policy. A large literature in environmental economics examines the links between environmental policy and innovation. This paper reviews recent literature on green innovation. I highlight major trends in the literature, including an...

I provide evidence about the effects of induced biased technical change as a main determinant of solar and wind energies adoption. This study presents an empirical framework based on an input demand function for electricity production. Implementing this model helps us to understand what is...