Linking Environmental and Innovation Policy

@inproceedings{Gerlagh2008LinkingEA,
  title={Linking Environmental and Innovation Policy},
  author={Reyer Gerlagh and Snorre Kverndokk and Knut Einar Rosendahl},
  year={2008}
}
This paper addresses the timing and interdependence between innovation and environmental policy in a model of research and development (R&D). On a first-best path the environmental tax is set at the Pigouvian level, independent of innovation policy. With infinite patent lifetime, the R&D subsidy should be constant and independent of the state of the environment. However, with finite patent lifetime, optimal innovation policy depends on the stage of the environmental problem. In the early stages… CONTINUE READING

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