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Preprints, Working Papers, ... Year : 2023

Cooperation in Green R&D and Environmental Policies: Taxes or Standards

Abstract

In this article, we compare a tax and a standard as environmental tools depending on firms' R&D strategy and the government's ability to credibly commit to its policy. We consider a duopoly model where production is polluting and in an effort to mitigate emissions, firms invest in green R&D (in the presence of technological spillovers) either cooperatively or non-cooperatively. We explore two policy games in which the regulator establishes an emission tax or an emission standard either before or after firms engage in R&D. We endogenize both the firms' R&D strategy and the regulator's choice of policy instrument. We find that when firms choose not to cooperate, an emission standard is socially preferable. Conversely, a tax is the better choice when firms collaborate in green R&D.
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Dates and versions

hal-03610541 , version 1 (16-03-2022)
hal-03610541 , version 2 (11-11-2022)
hal-03610541 , version 3 (12-12-2023)

Identifiers

  • HAL Id : hal-03610541 , version 3

Cite

Marie-Laure Cabon-Dhersin, Natacha Raffin. Cooperation in Green R&D and Environmental Policies: Taxes or Standards. 2023. ⟨hal-03610541v3⟩
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