On Backstops and Boomerangs: Environmental R&D under Technological Uncertainty

Arbeitspapier

The literature on environmental R&D frequently studies innovation as a two-stage process, with a single R&D event leading from a conventional polluting technology to a perfectly clean backstop. We allow for uncertainty in innovation in that the new technology may turn out to generate a new pollution problem. R&D may therefore be optimally undertaken more than once. Using and externding recent results from multi-stage optimal control theory, we provide a full characterization of the optimal pollution and R&D policies. The optimal R&D program is strictly sequential and has an endogenous stopping point. Uncertainty drives total R&D effort and its timing.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Discussion Paper Series ; No. 437

Classification and Topics

• Classification: Wirtschaft ; Environmental Economics: Technological Innovation ; Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling ; Management of Technological Innovation and R&D ; Optimization Techniques; Programming Models; Dynamic Analysis
• Subject: stock pollution ; backstop technology ; multi-stage optimal control ; pollution thresholds ; uncertainty ; Umwelttechnik ; Innovation ; Umweltbelastung ; Technologiepolitik ; Umweltpolitik ; Kontrolltheorie ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Goeschl, Timo ; Perino, Grischa
• Event: Veröffentlichung
• (who): University of Heidelberg, Department of Economics
• (where): Heidelberg
• (when): 2007

Further information

• Handle: http://hdl.handle.net/10419/127250
• Last update: 10.03.2025, 11:42 AM CET