The paper considers a climate change growth model with three R&D sectors dedicated to energy, backstop and CCS (Carbon Capture and Storage) efficiency. First, we characterize the set of decentralized equilibria: A particular equilibrium is associated to each vector of public tools which includes...

Theoretical analysis and empirical evidence show that leadership behavior in climate policy through increased abatement efforts or international transfers cannot be expected to be very successful. In this paper we instead show that pioneering activities, which are based on green technological...

This policy note investigates whether the current level of public support to environment-friendly technologies is sufficient to allow European countries to respond to the multiple challenges posed by climate change and other environmental concerns. We first lay out the justifications for...

In a domestic market, a duopoly produces a homogeneous final good, pollution, pollution abatement and R&D. One of the firms (foreign) has superior technology. The government regulates the duopoly by levying a pollution tax to maximize domestic welfare. We consider the potential implementation of...

We study optimal pollution abatement under a mixed oligopoly game when firms engage in emissions-reducing R&D that is imperfectly appropriable. The regulator uses a tax to curb emissions. Results show that in a mixed oligopoly, the public firm has positive emissions reduction in equilibrium;...

Asymmetric regulation of a global pollutant between countries can alter the competitiveness of industries and lead to emissions leakage, which hampers countries' welfare. In order to limit leakage, governments consider supporting domestic trade exposed firms by subsidizing their investments in...

Conventional wisdom argues that environmental policy is less costly if environmental policy induces the development of cleaner technologies. In contrast to this argument, we show that the cost of environmental policy (a reduction in emissions) may be larger with induced technical change than...

This paper aims to help policy makers identify how standards can contribute to the effective and cost-efficient development and deployment of eco-innovations (innovations that result in a reduction of environmental impact). To that end we discuss what standards are, how the process of...

In a model where firms face a continuous choice of how much to invest in environmental innovation, we show that an ever stricter environmental policy does not always lead to ever cleaner production methods and ever lower production of polluting goods. It does so when the abatement technology is...