The timing of environmental policy in a duopolistic market

  1. Rafael Moner-Colonques
  2. Santiago J. Rubio
Zeitschrift:
Economía agraria y recursos naturales

ISSN: 1578-0732

Datum der Publikation: 2015

Ausgabe: 15

Nummer: 1

Seiten: 11-40

Art: Artikel

DOI: 10.7201/EARN.2015.01.02 DIALNET GOOGLE SCHOLAR lock_openDialnet editor

Andere Publikationen in: Economía agraria y recursos naturales

Zusammenfassung

In this paper the strategic use of innovation by two polluting firms to influence environmental policy is evaluated. The analysis is carried out by comparing two alternative policy regimes for two policy instruments: Taxes and standards. The first of the regimes assumes that the regulator commits to an ex-ante level of the policy instrument. In the second one, there is no commitment. The results show that when there is no commitment and a tax is used to control emissions, the strategic behavior of firms can be welfare improving if the efficiency of the clean technology is relatively low. If this is not the case, the strategic behavior of the duopolists has a detrimental effect on welfare regardless of the policy instrument used to control emissions.

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Acknowledgements: The authors would like to thank two anonymous referees and Francisco André for their comments. The usual disclaimer applies. We gratefully acknowledge financial support from the Spanish Ministry of Economics and Competitiveness under project ECO2013-45045-R, and Generalitat Valenciana under project PROMETEO/2014 /Fase II.

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