[canceled] Market Structure and Technology Diffusion Incentives under Alternative Environmental Policy Schemes

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Frans de Vries, Department of Economics, Tilburg University

The seminar has been canceled

This paper compares emission taxes, subsidies, permits and credits with
respect to the incentives they create to enhance technology diffusion under
imperfect competition. Firms can adopt a "dirty" technology or a "clean"
abatement technology. When the clean and dirty products are perfect
substitutes, and clean firms face a net absolute advantage over dirty firms,
permits and taxes provide the strongest incentive, followed by credits and
subsidies respectively. This ranking order is reversed if there is a
distortion on output. Subsidies can neutralize this distortion; subsidies
stimulate output supply, which would normally be lower than optimal under
perfect competition.

Date: 26 October-00 0000