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EE Seminar

Environmental & Natural Resource Economics Seminar

Commitment and efficient inducing subsidy in the development of a clean technology

Speaker

Mathias Berthod
Post-Doctoral Researcher at CEE-M

Website

Abstract

In a model at the crossroads of Tsur and Zemel (2003) and Wirl (2013), I study the transition from a dirty to a clean technology when this latter is made more profitable with the accumulation of a stock of knowledge either by a monopoly or an oligopoly. I address the following questions: what is the optimal policy for a government if it cannot commit in the long run? Is it always possible to set tax and subsidy rates in order to induce efficiency? I find that if commitment to a tax path is impossible a tax alone is inefficient. However, if the government is able to commit in the short run, i.e if it announces its policy at each date before every other players, a subsidy to investments in knowledge, set together with the tax, can induce efficiency under the condition that the knowledge is accumulated by a monopoly. In contrast, if the knowledge is accumulated by a finite number of firms, the government’s policy is always inefficient because of a free rider issue

Practical information

Location

UMR CEE-M
Montpellier SupAgro / INRA - Bat. 26 - Centre de documentation Pierre Bartoli
2 Place Viala 34000 Montpellier

Dates & time

Feb 22, 2019
11:00
22
Feb

Contact

Alexandre Sauquet
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Gwenolé Le Velly
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