2002 World Congress of Environmental and Resource Economists

This paper examines the argument that environmental performance standards offer a relative disincentive for the adoption of cleaner technologies, and it shows that this relative disincentive exists when regulators cannot credibly commit to a stringent environmental standard. If the threat of a stringent standard were credible, then firms would have an increased incentive to invest in cleaner technologies. A commitment to a stringent standard can be credible if the firms are sufficiently heterogeneous in the adoption costs, if the regulator engages the firm repeatedly, or if the regulator can combine an environmental performance standard with another instrument, such as a subsidy to the adoption of a cleaner technology or fines for non-compliance.



	Paper Title:	Environmental Performance Standards And The Adoption Of Technology
	Presenting Author:	Robert D Mohr (University of New Hampshire)
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	Abstract:	This paper examines the argument that environmental performance standards offer a relative disincentive for the adoption of cleaner technologies, and it shows that this relative disincentive exists when regulators cannot credibly commit to a stringent environmental standard. If the threat of a stringent standard were credible, then firms would have an increased incentive to invest in cleaner technologies. A commitment to a stringent standard can be credible if the firms are sufficiently heterogeneous in the adoption costs, if the regulator engages the firm repeatedly, or if the regulator can combine an environmental performance standard with another instrument, such as a subsidy to the adoption of a cleaner technology or fines for non-compliance.
	Link to paper:	Not available

	Session / Day / Time	4F / Monday / 4:30 - 6:00 pm

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