Innovation without magic bullets: Stock pollution and R&D sequences

Goeschl, Timo and Perino, Grischa (2007) Innovation without magic bullets: Stock pollution and R&D sequences. Journal of Environmental Economics and Management, 54 (2). pp. 146-161.

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Abstract

We study the optimal R&D trajectory in a setting where new technologies are never perfect backstops in the sense that there is no perfectly clean technology that eventually solves the pollution problem once and for all. New technologies have strings attached, i.e. each emits a specific stock pollutant. Damages are convex in individual pollution stocks but additive across stocks, creating gains from diversification. The research and pollution policies are tightly linked in such a setting. We derive the optimal pollution path and R&D program. Pollution stocks overshoot and in the long-run all available technologies produce. Research is sequential and the optimal portfolio of technologies is finite.

Item Type:	Article
Faculty \ School:	Faculty of Social Sciences > School of Economics
Depositing User:	Gina Neff
Date Deposited:	14 Feb 2011 16:37
Last Modified:	29 May 2024 14:30
URI:	https://ueaeprints.uea.ac.uk/id/eprint/21359
DOI:	10.1016/j.jeem.2007.03.001

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