The policy impact on clean technology diffusion

Abstract

We employ a logistic model to examine the impacts of environmental policy (emission standards and economic instruments) and plant characteristics on clean technology diffusion by using the amount of Total Suspended Particulate (TSP), Sulfer Oxide (SOx), and Nitric Oxide (NOx) emissions in 14 power plants provided by Taiwan Power Company covering the period of 1989-2006. The concentration of the pollutants emitted to air from fossil-fired power plants is modeled as the performance of technology development. The objective of this study is to investigate the determinants of technology diffusion to help generate strategic insights on environmental policy. The results show that the environmental policy by regulating emission standard provides a negative effect on technology diffusion while the 'mixed policy' (an integration of environmental standards and economic instruments) has a significantly positive effect on technology diffusion for NOx but insignificantly for TSP and SOx.