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Environmental and Resource Economics

, Volume 47, Issue 2, pp 261–274 | Cite as

Environmental Policy Instruments: Technology Adoption Incentives with Imperfect Compliance

  • Carmen Arguedas
  • Eva Camacho
  • José Luis Zofío
Article

Abstract

We study the incentives to adopt advanced abatement technologies in the presence of imperfect compliance. Interestingly, incentives under emission taxes and pollution abatement subsidies are the same that in the perfect compliance scenario. However, under emission standards imperfect compliance can increase firms’ incentives to invest, whereas under an emission permit mechanism investment incentives decrease only if widespread non-compliance induces a reduction in the permit price. Our results are valid for fairly general characteristics of the monitoring and enforcement strategies commonly found in both, theoretical and empirical applications.

Keywords

Environmental policy Monitoring Non-compliance Technology adoption 

JEL Classification

K42 L51 Q28 

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Copyright information

© Springer Science+Business Media B.V. 2010

Authors and Affiliations

  • Carmen Arguedas
    • 1
  • Eva Camacho
    • 2
  • José Luis Zofío
    • 1
  1. 1.Departamento de Análisis Económico: Teoría Económica e Historia EconómicaUniversidad Autónoma de MadridMadridSpain
  2. 2.Departamento de EconomíaUniversitat Jaume ICastellónSpain

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