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Generalized Progress of Abatement Technology: Incentives Under Environmental Liability Law

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  • Alfred Endres
  • Tim Friehe

Abstract

This paper considers the incentives environmental liability creates to improve pollution abatement technology. Our analysis considers technical progress in end-of-pipe abatement and in the production technology used, thereby generalizing the approach taken by Endres et al. (Environ Resour Econ 36:341–366, 2007 ). We establish that this generalization has drastic repercussions on incentives under negligence liability, while the performance of strict liability is not compromised. Furthermore, it is demonstrated that the social desirability of investment in abatement or production technology (or both) decisively determines how ex-ante and ex-post regulation fare with respect to welfare maximization in the case of negligence liability. Copyright Springer Science+Business Media B.V. 2012

Suggested Citation

  • Alfred Endres & Tim Friehe, 2012. "Generalized Progress of Abatement Technology: Incentives Under Environmental Liability Law," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(1), pages 61-71, September.
    • Handle: RePEc:kap:enreec:v:53:y:2012:i:1:p:61-71
    DOI: 10.1007/s10640-012-9547-5
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    Cited by:

    1. Alfred Endres & Tim Friehe & Bianca Rundshagen, 2015. "“It’s All in the Mix!”- Internalizing externalities with R&D subsidies and environmental liability," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 44(1), pages 151-178, January.
    2. Alfred Endres & Tim Friehe, 2015. "The Compensation Regime in Liability Law: Incentives to Curb Environmental Harm, Ex Ante and Ex Post," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(1), pages 105-123, September.
    3. Alfred Endres & Tim Friehe & Bianca Rundshagen, 2015. "Environmental liability law and R&D subsidies: results on the screening of firms and the use of uniform policy," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(4), pages 521-541, October.
    4. Turken, Nazli & Carrillo, Janice & Verter, Vedat, 2020. "Strategic supply chain decisions under environmental regulations: When to invest in end-of-pipe and green technology," European Journal of Operational Research, Elsevier, vol. 283(2), pages 601-613.

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