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| Indrani Roy chowdhury |
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| ''Incentives for Green R&D in a Dirty Industry under Price Competition'' |
| ( 2009, Vol. 29 No.3 ) |
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| In an oligopolistic framework with
price competition, we examine the effect of abatement taxes, as well
as emission caps on the incentives for adopting a green technology. We identify two new
strategic effects, namely the relative efficiency
effect, and the competition softening effect, that affect the incentive for green R&D. Under an
abatement tax, R&D incentives increase whenever the new
technology is non-drastic, and the demand function is either
approximately linear, or not too elastic. Another sufficient
condition is that the market size be sufficiently large. With
emission caps, the result depends on
how green the new technology is. |
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| Keywords: Abatement tax, emission caps, environmental
policy, green R&D, price competition. |
JEL: L1 - Market Structure, Firm Strategy, and Market Performance: General
H2 - Taxation, Subsidies, and Revenue: General |
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| Manuscript Received : Jul 21 2009 | | Manuscript Accepted : Sep 11 2009 |
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