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Technology diffusion and environmental regulation: the adoption of natural gas-fired combined cycle generating units

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  • Elaine F. Frey

Abstract

Even though environmental policy can affect the path of technology diffusion, the economics literature contains limited empirical evidence of this relationship. This paper provides insight into the technology adoption decisions of electric generating firms. Specifically, the diffusion of combined cycle (CC) generating units is examined. This technology is ‘environmentally friendly’ in that, it is cleaner and more efficient than alternative generating units. The empirical model explores the decision to adopt a CC generating unit and the extent to which the technology is adopted in response to environmental regulations imposed on producers. Zero-inflated models are used to evaluate adoption decisions at the plant-level as well as the firm-level. This research shows that environmental regulation has a significant effect on technology choice and the extent of adoption in this industry. Findings suggest that the stringency of regulations that control the building of new generating units is particularly influential for established power plants.

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  • Elaine F. Frey, 2012. "Technology diffusion and environmental regulation: the adoption of natural gas-fired combined cycle generating units," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 21(7), pages 567-587, October.
    • Handle: RePEc:taf:ecinnt:v:21:y:2012:i:7:p:567-587
    DOI: 10.1080/10438599.2011.604919
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    1. Davies, Stephen W., 1979. "Inter-firm diffusion of process innovations," European Economic Review, Elsevier, vol. 12(4), pages 299-317, October.
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    Cited by:

    1. Elaine F. Frey, 2013. "Technology Diffusion and Environmental Regulation: The Adoption of Scrubbers by Coal-Fired Power Plants," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    2. Sebastian Losacker & Hendrik Hansmeier & Jens Horbach & Ingo Liefner, 2023. "The geography of environmental innovation: a critical review and agenda for future research," Review of Regional Research: Jahrbuch für Regionalwissenschaft, Springer;Gesellschaft für Regionalforschung (GfR), vol. 43(2), pages 291-316, August.
    3. Losacker, Sebastian & Hansmeier, Hendrik & Horbach, Jens & Liefner, Ingo, 2021. "The geography of environmental innovation: A critical review and agenda for future research," Papers in Innovation Studies 2021/15, Lund University, CIRCLE - Centre for Innovation Research.
    4. Frey, Elaine F. & Mojtahedi, Saba, 2018. "The impact of solar subsidies on California's non-residential sector," Energy Policy, Elsevier, vol. 122(C), pages 27-35.

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