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Title:Incentives for environmental R&D PDF Logo
Authors:Greaker, Mads
Hoel, Michael
Issue Date:2011
Series/Report no.:CESifo working paper: Energy and Climate Economics 3468
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.
environmental R&D
endogenous technological change
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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