Endogenous technical change and environmental regulation

Journal Article · Sat Sep 01 00:00:00 EDT 1984 · J. Environ. Econ. Manage.; (United States)

DOI:https://doi.org/10.1016/0095-0696(84)90018-4· OSTI ID:6588633

Mendelsohn, R

A model of environmental regulation under uncertainty is developed to compare the effect of price versus quantity rules upon technical change. Starting with Weitzman's model of regulation under uncertainty, endogenous technical change is added. Quantity rules tend to encourage more efficient levels of technical change. Under price rules, firms tend to overreact, producing either too much or too little research and development depending upon the realization of the stochastic element of the model. This technical change advantage of quantity rules comes from the uncertainty surrounding the benefits of research and development. Uncertainty about the costs of research and development favors neither rule but simply increases the importance of choosing the correct rule.

• Research Organization: Univ. of Washington, Seattle
• OSTI ID: 6588633
• Journal Information: J. Environ. Econ. Manage.; (United States), Vol. 11:3
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING
POLICY AND ECONOMY
AIR POLLUTION ABATEMENT
COST BENEFIT ANALYSIS
MATHEMATICAL MODELS
ECONOMICS
ENVIRONMENTAL POLICY
PRICES
PRODUCTION
RESEARCH PROGRAMS
TECHNOLOGY UTILIZATION
GOVERNMENT POLICIES
POLLUTION ABATEMENT
290300* - Energy Planning & Policy- Environment
Health
& Safety
290200 - Energy Planning & Policy- Economics & Sociology