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Author:Endres, A.
Friehe, T.
Title:Incentives to diffuse advanced abatement technology under environmental liability law
Journal:Journal of Environmental Economics and Management
2011 : JUL, VOL. 62:1, p. 30-40
Index terms:liability
pollution
direct costing
incentives
air pollution
technology
diffusion
Language:eng
Abstract:Polluting firms having advanced abatement technology at their disposal have incentives or disincentives of sharing this technology with other polluters. The ‘direction’ and extent of those incentives depend on the liability rule applicable and the way technical change affects marginal abatement costs. We suggest that incentives for diffusion are socially optimal under strict liability and socially suboptimal under negligence if technical change diminishes marginal abatement costs for all abatement levels. Negligence may, however, cause better diffusion incentives than strict liability if technical change decreases (increases) marginal abatement costs for low (high) abatement levels.
SCIMA record nr: 275762
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