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Green Technology and Optimal Emissions Taxation
  • Stuart McDonald, The University of Queensland
  • Joanna Poyago-Theotoky, La Trobe University

We examine the impact of an optimal emissions tax on research and development of emission reducing green technology (E-R&D) in the presence of R\&D spillovers. We show that the size and effectiveness of the optimal emissions tax depends on the type of the R&D spillover: input or output spillover. In the case of R&D input spillovers (where only knowledge spillovers are accounted for), the optimal emissions tax required to stimulate R&D is always higher than when there is an R&D output spillover (where abatement and knowledge spillovers exist simultaneously). We also find that optimal emissions taxation and cooperative R&D complement each other when R&D spillovers are small, leading to lower emissions.

  • Environmental R&D,
  • Green Technology,
  • R&D Spillover,
  • Emissions Tax
Publication Date
March, 2014
Citation Information
Stuart McDonald and Joanna Poyago-Theotoky. "Green Technology and Optimal Emissions Taxation" (2014)
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