Environmental Regulation, Investment Timing, and Technology Choice

Gray, Wayne B.; Shadbegian, Ronald J.

doi:10.1111/1467-6451.00070

Cited by 272 publications

(130 citation statements)

References 6 publications

(12 reference statements)

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“…The first research stream shows broad evidence that renewable energy policy makes a primary driving effect on TIRES, but that the choice and design of policies should also be the focus of research [26][27][28]. In general, renewable energy policies can be divided into technology push and market-pull.…”

Section: Renewable Energy Policiesmentioning

confidence: 99%

Factors That Influence Renewable Energy Technological Innovation in China: A Dynamic Panel Approach

et al. 2018

Sustainability

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Abstract:We examine the driving effects of various factors on technological innovation to renewables (TIRES), focusing on a set of 29 provinces in China, and apply a dynamic panel approach. China has become a leading player in research and development spending in renewables, and the dynamic panel estimators we use prove themselves to be suitable in handling the persistent effect on TIRES. The level of TIRES in the previous periods is positively and highly correlated with that in the current period and confirmed the need for a stable and consistent policy support for renewables. Electricity consumption is the most important driver for all renewables and wind energy, but the driving effect was weaker for solar energy and biomass. Research and development intensity is the most important driver for biomass, but is only the second most important driver for all renewables, solar energy and wind energy. Unexpectedly, electricity price has had significant negative impacts on TIRES, which reveals that lowering electricity prices will lead to higher innovation in renewables. The driving effect of renewable energy tariff surcharge subsidy is not significant, which means that Chinese subsidy policy has not played the desired role. The driving effect of installed renewable energy capacity is also minimal, which may be due to the fact that overcapacity will hinder TIRES in China. This paper may help policy-makers and the industry understand how to promote TIRES in China effectively based on these above influential factors.

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Section: Renewable Energy Policiesmentioning

confidence: 99%

Factors That Influence Renewable Energy Technological Innovation in China: A Dynamic Panel Approach

et al. 2018

Sustainability

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“…Previous studies of diffusion of environmental technologies show that regulatory stringency matters (Gray and Shadbegian 1998;Kerr and Newell 2003;Snyder et al 2003). Since NO X emissions technologies provide no benefit to the plant other than reducing emissions, they are of little use unless a boiler is required to reduce NO X emissions.…”

Section: Regulationsmentioning

confidence: 99%

“…Many plants operate in regulated markets, and most serve dedicated areas with little competition. Furthermore, the choice to adopt environmental technology is driven by regulatory pressures (Gray and Shadbegian 1998;Kerr and Newell 2003;Snyder et al 2003). The benefit that firms receive from adopting an environmental technology is increased compliance with regulation.…”

mentioning

confidence: 99%

Exploring Links Between Innovation and Diffusion: Adoption of NOX Control Technologies at US Coal-fired Power Plants

Popp

2009

Environ Resource Econ

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While many studies have looked at innovation and adoption of technologies separately, the two processes are linked. Advances (and expected advances) in a single technology should affect both its adoption rate and the adoption of alternative technologies. This paper combines plant-level data on US coal-fired electric power plants with patent data pertaining to NO X pollution control techniques to study this link. As in other studies of environmental technologies, the effect of other explanatory variables is dominated by the effect of environmental regulations, demonstrating that the mere presence of environmental technologies is not enough to encourage its usage. Nonetheless, I do find that technological advances are important for the adoption of existing combustion modification technologies. However, these advances are less important for the adoption of newer post-combustion control techniques, which are adopted only when needed to comply with the strictest emission limits.

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“…Put it otherwise: Also the strong version of the Porter hypothesis may not hold in general. This sceptic view is supported by a study related to the strong version offered by Gray and Shadbegian (1998). They find that pollution abatement investment (i.e.…”

Section: Related Researchmentioning

confidence: 92%

Unmasking the Porter Hypothesis: Environmental Innovations and Firm-Profitability

Rexhäuser

Rammer

2011

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:http://ftp.zew.de/pub/zew-docs/dp/dp11036.pdf NON-TECHNICAL SUMMARYEnvironmental regulation. What economists usually associate with these words are barriers to competitiveness. The association of Porter (1991) and Porter and van der Linde (1995) is a different one. By relying on a few case studies, they argue that even if stringent regulations impose costs on affected firms, regulations can trigger innovations which finally overcompensate regulatory costs. This view has become known as the Porter hypothesis which postulates a so called "win-win" situation that is supposed to improve both environmental quality and firms' profitability.We attempt to test this hypothesis based on comprehensive data of firms from Germany. In contrast to previous empirical work, we distinguish innovations that directly reduce resource consumption (and thus externalities) of the innovating firm on the one hand, and innovations that only reduce environmental externalities without increasing resource efficiency on the other. For both types of environmental innovation we separate between regulation-induced and voluntary innovations. Compared to firms that did not introduce any type of environmental innovation, both regulation induced and voluntary innovations that improve resource efficiency increase profitability. This positive effect is larger for regulation driven innovation since they lead to an 1.4 percentage point increase in profitability (measured with return on sales) while voluntary innovations only increase profitability by 0.8 percentage points. However, innovation that reduces environmental externalities reduce firms profitability by 0.8 percentage points if they are regulation-induced whereas voluntary abatement investment of this type does not lead to significant profitability effects.We use data from the German Community Innovation Survey (CIS) in 2009 (the Mannheim Innovation Panel 2009) since it includes a set of questions on environmental innovation adoption and whether this is due to regulation. German CIS data are an appropriate data source since Germany is one of the most regulated countries in the world. Following Porter's (1991) hypothesis that environmental regulation can improve firms' competitiveness we distinguish regulation induced and voluntary environmental innovations. We find that innovations which reduce environmental externalities reduce firms' profits, as long as they are induced by regulations. H...

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Environmental Regulation, Investment Timing, and Technology Choice

Cited by 272 publications

References 6 publications

Factors That Influence Renewable Energy Technological Innovation in China: A Dynamic Panel Approach

Factors That Influence Renewable Energy Technological Innovation in China: A Dynamic Panel Approach

Exploring Links Between Innovation and Diffusion: Adoption of NOX Control Technologies at US Coal-fired Power Plants

Unmasking the Porter Hypothesis: Environmental Innovations and Firm-Profitability

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