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Incentives for Environmental R&D

Author

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  • Mads Greaker
  • Michael Hoel

Abstract

Since governments can influence the demand for a new abatement technology through their environmental policy, they may be able to expropriate innovations in new abatement technology ex post. This suggests that incentives for environmental R&D may be lower than the incentives for market goods R&D. This in turn may be used as an argument for environmental R&D getting more public support than other R&D. In this paper we systematically compare the incentives for environmental R&D with the incentives for market goods R&D. We find that the relationship might be the opposite: When the innovator is able to commit to a licence fee before environmental policy is resolved, incentives are always higher for environmental R&D than for market goods R&D. When the government sets its policy before or simultaneously with the innovator’s choice of licence fee, incentives for environmental R&D may be higher or lower than for market goods R&D.

Suggested Citation

  • Mads Greaker & Michael Hoel, 2011. "Incentives for Environmental R&D," CESifo Working Paper Series 3468, CESifo.
    • Handle: RePEc:ces:ceswps:_3468
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    Cited by:

    1. Cooper, James & Carliell-Marquet, Cynthia, 2013. "A substance flow analysis of phosphorus in the UK food production and consumption system," Resources, Conservation & Recycling, Elsevier, vol. 74(C), pages 82-100.
    2. Emilson C.D. Silva & Chikara Yamaguchi, 2018. "Overlapping Climate Clubs under Transaction Costs," CESifo Working Paper Series 7319, CESifo.
    3. Alain-Désiré Nimubona & Hassan Benchekroun, 2014. "Environmental R&D in the Presence of an Eco-Industry," Working Papers 1406, University of Waterloo, Department of Economics, revised Sep 2014.
    4. Ye, Gui & Yuan, Hongping & Shen, Liyin & Wang, Hongxia, 2012. "Simulating effects of management measures on the improvement of the environmental performance of construction waste management," Resources, Conservation & Recycling, Elsevier, vol. 62(C), pages 56-63.
    5. Xing, Mingqing & Tan, Tingting & Wang, Xia, 2021. "Emission taxes and environmental R&D risk choices in a duopoly market," Economic Modelling, Elsevier, vol. 101(C).

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    More about this item

    Keywords

    R&D; environmental R&D; innovations; endogenous technological change;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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