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Emission Reduction Technology Licensing and Diffusion Under Command-and-Control Regulation

Author

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  • Haiyang Xia

    (School of Business, East China University of Science and Technology)

  • Tijun Fan

    (School of Business, East China University of Science and Technology)

  • Xiangyun Chang

    (School of Business, East China University of Science and Technology)

Abstract

In this paper, we discuss a patented emission reduction technology that a monopolistic upstream eco-industry licenses to the polluting firms in a downstream oligopolistic industry, which is subject to command-and-control regulation. We explicitly model the interaction between the outside innovator and the polluting firms, using a non-cooperative game-theoretical framework. We find that full and partial diffusion can both occur in equilibrium, depending on the relationship between environmental regulation stringency and cleanliness improvement of the new technology. Furthermore, we study the impacts of environmental regulation stringency and the improvement in cleanliness on the adoption and the diffusion of the emission reduction technology.

Suggested Citation

  • Haiyang Xia & Tijun Fan & Xiangyun Chang, 2019. "Emission Reduction Technology Licensing and Diffusion Under Command-and-Control Regulation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(2), pages 477-500, February.
    • Handle: RePEc:kap:enreec:v:72:y:2019:i:2:d:10.1007_s10640-017-0201-0
    DOI: 10.1007/s10640-017-0201-0
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    3. Yijing Zou & Dayi He & Rui Sun, 2023. "Evolutionary Game Analysis of Risk in Third-Party Environmental Governance," Sustainability, MDPI, vol. 15(18), pages 1-20, September.

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