Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/47349
Authors: 
Greaker, Mads
Hoel, Michael
Year of Publication: 
2011
Series/Report no.: 
Memorandum // Department of Economics, University of Oslo 2011,15
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.
Subjects: 
R&D
environmental R&D
innovations
endogenous technological change
JEL: 
H23
O30
Q55
Q58
Document Type: 
Working Paper

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