Pollution permits and environmental innovation

• 成果类型: Article; Proceedings Paper
• 署名作者: Laffont, JJ; Tirole, J
• 署名单位: Universite de Toulouse; Universite Toulouse 1 Capitole; Massachusetts Institute of Technology (MIT)
• 刊物名称: JOURNAL OF PUBLIC ECONOMICS
• ISSN/ISSBN: 0047-2727
• DOI: 10.1016/0047-2727(96)01576-9
• 发表日期: 1996
• 页码: 127-140
• 关键词: Regulation; environment; asymmetric information; INNOVATION

摘要

This paper starts with a warning about the negative impact of plain pollution allowance markets on environmental pollution innovation. Stand-alone spot markets enable the government to expropriate an innovation by offering a competing 'technology' (pollution permits) that puts an arbitrary downward pressure on the licensing price. Advance allowances reduce expropriation but still create suboptimal incentives for innovation. They have the further drawback that permits are inefficiently used when the innovation occurs. Options to pollute at a given striking price fare better than allowances because they create private incentives to phase out pollution in the case of innovation. We characterize the social optimum and show that it can be implemented by issuing options to pollute, inter alia. Finally, the paper compares ex ante and ex post government procurement. Surprisingly, ex post licensing by the innovator to the government may yield a higher licensing fee than an ex ante contract.