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Cooperation in green R &D and environmental policies: tax or standard

Author

Listed:
  • Marie-Laure Cabon-Dhersin

    (LERN - Laboratoire d'Economie Rouen Normandie - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université - IRIHS - Institut de Recherche Interdisciplinaire Homme et Société - UNIROUEN - Université de Rouen Normandie - NU - Normandie Université)

  • Natacha Raffin

    (ENS Paris Saclay - Ecole Normale Supérieure Paris-Saclay)

Abstract
In this article, we compare a tax and a standard as environmental tools depending on firms’ R &D strategy and the government’s ability to credibly commit to its policy. We consider a duopoly model where production is polluting and in an effort to mitigate emissions, firms invest in green R &D (in the presence of technological spillovers) either cooperatively or non-cooperatively. We explore two policy games in which the regulator establishes an emission tax or an emission standard either before or after firms engage in R &D. We endogenize both the firms’ R &D strategy and the regulator’s choice of policy instrument. We find that an emission standard is adopted only when firms choose not to cooperate. Conversely, a tax is desirable when firms collaborate in green R &D. Moreover, we expand our framework by offering the opportunity for the regulator to authorize or ban cooperation in green R &D before the firms make their strategic decisions.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marie-Laure Cabon-Dhersin & Natacha Raffin, 2024. "Cooperation in green R &D and environmental policies: tax or standard," Post-Print hal-04561519, HAL.
    • Handle: RePEc:hal:journl:hal-04561519
    DOI: 10.1007/s11149-024-09475-4
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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