Emission taxation, green innovations and inverted-U aggregate R&D efforts in a linear state oligopoly game

Dragone, Davide ; Lambertini, Luca ; Palestini, Arsen (2017) Emission taxation, green innovations and inverted-U aggregate R&D efforts in a linear state oligopoly game. Bologna: Dipartimento di Scienze economiche DSE, p. 17. DOI 10.6092/unibo/amsacta/5540. In: Quaderni - Working Paper DSE (2000). ISSN 2282-6483.
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Abstract

We revisit the well known differential Cournot game with polluting emissions dating back to Benchekroun and Long (1998), proposing a version of the model in which environmental taxation is levied on emissions rather than the environmental damage. This allows to attain strong time consistency under open-loop information, and yields two main results which can be summarized as follows: (i) to attain a fully green technology in steady state, the regulator may equivalently adopt an appropriate tax rate (for any given number of firms) or regulate market access (for any given tax rate); (ii) if the environmental damage depends on emissions only (i.e., not on industry output) then the aggregate green R&D effort takes an inverted-U shape, in accordance with Aghion et al. (2005), and the industry structure maximising aggregate green innovation also minimises individual and aggregate emissions.

Abstract
Document type
Monograph (Working Paper)
Creators
CreatorsAffiliationORCID
Dragone, DavideUniversità di Bologna0000-0002-2725-4743
Lambertini, LucaUniversità di Bologna0000-0001-6353-4753
Palestini, ArsenUniversità La Sapienza0000-0003-0897-382X
Keywords
pollution, green R&D, emission taxation, differential games
Subjects
ISSN
2282-6483
DOI
Deposit date
11 Apr 2017 08:12
Last modified
07 Jun 2017 09:54
URI

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