Differential Impact of Environmental Policy Instruments on Technological Change: A Review of the Empirical Literature

This survey reviews the empirical literature on the impact of environmental policy instruments on the rate and direction of technological change. The survey is explicitly focused on the empirical identification of the hypothesis to expect a stronger impact from market-based incentives than from non-market alternatives. The general picture emerging from the recent literature is that there is a clear impact of environmental policy on invention, innovation and diffusion of technologies. Although studies on a differential impact are still very scarce, the available evidence suggests that innovators look carefully for rent opportunities, which in turn depend on the specific incentives signalled by the type of (environmental) policy.

[1]  Arik Levinson.  Grandfather regulations, new source bias, and state air toxics regulations , 1999 .

[2]  G. Jenkins,et al.  Fiscal Policies To Control Pollution: International Experience , 1992 .

[3]  H. Vollebergh,et al.  Green Taxes and Administrative Costs: the Case of Carbon Taxation , 1999 .

[4]  Eric Malm.  An Actions-Based Estimate of the Free Rider Fraction in Electric Utility DSM Programs , 1996 .

[5]  David Popp,et al.  Induced Innovation and Energy Prices , 2001 .

[6]  A. Jaffe,et al.  Environmental Policy and Technological Change , 2002 .

[7]  Robert N. Stavins,et al.  The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing , 2003 .

[8]  Ada Ferrer-i-Carbonell,et al.  The ex post impact of an energy tax on household energy demand , 2004 .

[9]  J. Tirole,et al.  The Management of Innovation , 1994 .

[10]  M. Porter,et al.  Toward a New Conception of the Environment-Competitiveness Relationship , 1995 .

[11]  Ashoka Mody,et al.  Innovation and the international diffusion of environmentally responsive technology , 1996 .

[12]  P. Romer.  Endogenous Technological Change , 1989, Journal of Political Economy.

[13]  D. Greene.  CAFE OR PRICE?: An Analysis of the Effects of Federal Fuel Economy Regulations and Gasoline Price on New Car MPG, 1978-89 , 1990, Controlling Automobile Air Pollution.

[14]  A. Jaffe,et al.  The Induced Innovation Hypothesis and Energy-Saving Technological Change , 1998 .

[15]  Franz Wirl,et al.  Analysis of United States' Utility Conservation Programs , 1998 .

[16]  Lloyd Orr,et al.  Incentive for Innovation as the Basis for Effluent Charge Strategy , 1976 .

[17]  Randy A. Becker,et al.  Effects of Air Quality Regulations on Polluting Industries , 1997, Journal of Political Economy.

[18]  C. Russell,et al.  Comparative analysis of alternative policy instruments , 1985 .

[19]  Jean Tirole,et al.  Pollution Permits and Environmental Innovation , 1996 .

[20]  J. A. Smulders,et al.  The impact of energy conservation on technology and economic growth , 2003 .

[21]  Kenneth Train,et al.  Estimation of net savings from energy-conservation programs , 1994 .

[22]  Céline Nauges,et al.  Ex Post Evaluation of an Earmarked Tax on Air Pollution , 2006, Land Economics.

[23]  René Kemp,et al.  The Diffusion of Biological Waste-Water Treatment Plants in the Dutch Food and Beverage Industry , 1998 .

[24]  Joseph E. Stiglitz,et al.  Growth with Exhaustible Natural Resources: Efficient and Optimal Growth Paths , 1974 .

[25]  Richard G. Newell,et al.  Technological Change and the Environment , 2001 .

[26]  Till Requate,et al.  Dynamic incentives by environmental policy instruments—a survey , 2005 .

[27]  David Popp,et al.  Lessons from Patents: Using Patents to Measure Technological Change in Environmental Models , 2003 .

[28]  M. Keen,et al.  The balance between specific and ad valorem taxation , 1998 .

[29]  Gilbert E. Metcalf,et al.  Energy tax credits and residential conservation investment: Evidence from panel data , 1995 .

[30]  G. Helfand,et al.  Erratum: Standards versus Standards: The Effects of Different Pollution Restrictions , 1991 .

[31]  Andreas R. Ziegler,et al.  The influence of different characteristics of the EU environmental management and auditing scheme on technical environmental innovations and economic performance , 2006 .

[32]  Ronald J. Shadbegian,et al.  Environmental Regulation, Investment Timing, and Technology Choice , 1997 .

[33]  Thomas C. Kinnaman,et al.  "Household Responses for Pricing Garbage by the Bag," , 1994 .

[34]  D. Popp.  Exploring Links between Innovation and Diffusion: Adoption of Nox Control Technologies at U.S. Coal-Fired Power Plants , 2006 .

[35]  Chaomei Chen,et al.  Patents, citations & innovations: A window on the knowledge economy , 2003, J. Assoc. Inf. Sci. Technol..

[36]  M. Cropper,et al.  Sulfur Dioxide Control by Electric Utilities: What Are the Gains from Trade? , 1998, Journal of Political Economy.

[37]  M. S. Taylor,et al.  Trade and the Environment: Theory and Evidence , 2003 .

[38]  Adam B. Jaffe,et al.  Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Te , 1995 .

[39]  Franz Wirl,et al.  Lessons from Ltility Conservation Programs , 2000 .

[40]  Smita B. Brunnermeier,et al.  Determinants of environmental innovation in US manufacturing industries , 2003 .

[41]  D. Acemoglu.  Directed Technical Change , 2001 .

[42]  K. Train,et al.  Mixed Logit with Repeated Choices: Households' Choices of Appliance Efficiency Level , 1998, Review of Economics and Statistics.

[43]  Andreas Löschel,et al.  Technological Change in Economic Models of Environmental Policy: A Survey , 2002 .

[44]  A. Jaffe,et al.  Technological Change and the Environment , 2000 .

[45]  R. Stavins,et al.  Experience with Market-Based Environmental Policy Instruments , 2002 .

[46]  W. E. Watkins,et al.  Investment in Energy Efficiency: Do the Characteristics of Firms Matter? , 1998, Review of Economics and Statistics.

[47]  Wallace E. Oates,et al.  The theory of environmental policy , 1976 .

[48]  Asami Miketa,et al.  The impact of R&D on innovation for wind energy in Denmark, Germany and the United Kingdom , 2005 .

[49]  William J. Baumol,et al.  The theory of environmental policy: Preface to the second edition , 1988 .

[50]  P. Howitt,et al.  Endogenous Growth Theory , 1999 .

[51]  David Popp,et al.  International Innovation and Diffusion of Air Pollution Control Technologies: The Effects of Nox and So2 Regulation in the Us, Japan, and Germany , 2004 .

[52]  Allen S. Bellas,et al.  Technological Change for Sulfur Dioxide Scrubbers under Market-Based Regulation , 2005, Land Economics.

[53]  Ronald J. Shadbegian,et al.  Pollution abatement expenditures and plant-level productivity: A production function approach , 2005 .

[54]  Randy A. Becker,et al.  Effects of Air Quality Regulation on in Polluting Industries , 1997 .

[55]  Adam B. Jaffe,et al.  Environmental Regulation and Innovation: A Panel Data Study , 1996, Review of Economics and Statistics.

[56]  Ernst Worrell,et al.  Tax and Fiscal Policies for Promotion of Industrial Energy Efficiency: A Survey of International Experience - eScholarship , 2005 .

[57]  A. Jaffe,et al.  A tale of two market failures: Technology and environmental policy , 2005 .

[58]  Daron Acemoglu.  Directed Technical Change , 2002 .

[59]  Don Fullerton,et al.  A Framework to Compare Environmental Policies , 2001 .

[60]  Allen S. Bellas,et al.  Empirical evidence of advances in scrubber technology , 1998 .

[61]  Kelly B. Maguire,et al.  The Pace of PACE at the Environmental Protection Agency , 2003 .

[62]  Stephen J. DeCanio,et al.  The efficiency paradox: bureaucratic and organizational barriers to profitable energy-saving investments , 1998 .

[63]  J. Bushnell,et al.  The Economic Effects of Vintage Differentiated Regulations: The Case of New Source Review , 2007 .

[64]  W. Brock,et al.  Economic Growth and the Environment: A Review of Theory and Empirics. , 2004 .

[65]  Hans-fürgen Engelbrecht.  Endogenous Growth Theory Philippe Aghion and Peter Howitt Cambridge, MA, MIT Press, 1998, xiii+ 694 pp., US$59.95, ISBN 0-262-01166-2 , 1999 .

[66]  S. L. Phasedown,et al.  Policy-Induced Technology Adoption : Evidence from the U . , 2000 .

[67]  L. H. Isaksson,et al.  Abatement costs in response to the Swedish charge on nitrogen oxide emissions , 2005 .