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Cooperation in Green R&D and Environmental Policies: Taxes versus Standards

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Abstract

This article compares taxes and standards as environmental policies in a duopoly model where production generates pollution. To lower their emissions, firms invest in upstream green R&D (in the presence of technological spillovers) either cooperatively or non-cooperatively, and then compete in quantities. The outcomes of the two policies are identical when firms do not cooperate in R&D; R&D cooperation under taxes always improves social welfare by increasing abatement efforts and increasing consumer surplus. Conversely, R&D cooperation under standards pushes firms to reduce production, which is harmful for consumers but better for the environment.
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Dates and versions

hal-03610541 , version 1 (16-03-2022)
hal-03610541 , version 2 (11-11-2022)

Identifiers

  • HAL Id : hal-03610541 , version 2

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Marie-Laure Cabon-Dhersin, Natacha Raffin. Cooperation in Green R&D and Environmental Policies: Taxes versus Standards. 2022. ⟨hal-03610541v2⟩
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