{"id":5024,"date":"2016-12-01T00:00:00","date_gmt":"2016-11-30T18:30:00","guid":{"rendered":"https:\/\/www.isid.ac.in\/~cecfee\/?post_type=publication&#038;p=5024"},"modified":"2025-04-30T11:40:20","modified_gmt":"2025-04-30T06:10:20","slug":"climate-policy-and-innovation-in-the-absence-of-commitment","status":"publish","type":"publication","link":"https:\/\/www.isid.ac.in\/~cecfee\/publication\/climate-policy-and-innovation-in-the-absence-of-commitment\/","title":{"rendered":"Climate Policy and Innovation in the Absence of Commitment"},"content":{"rendered":"<p>We compare the effects of price and quantity instruments (an emissions tax and a quota with tradable permits) on the incentive to innovate to reduce the cost of an emission-free technology. We assume that the government cannot commit to the level of a policy instrument before R&amp;D occurs but sets the level to be socially optimal after the results of R&amp;D are realized. The equivalence of price and quantity instruments in inducing innovation that is seen in end-of-pipe abatement models does not hold. When the marginal cost of the dirty technology is constant, then a quota can induce R&amp;D, but a tax is completely ineffective. However, if the marginal cost function of the dirty technology is steep enough, then both a tax and a quota with tradable permits can induce R&amp;D, and the tax will do so in a wider range of circumstances. Furthermore, in this case, an R&amp;D subsidy may induce R&amp;D and raise welfare whether a tax or a quota regime is in place.<\/p>\n","protected":false},"featured_media":0,"parent":0,"template":"","format":"standard","meta":{"_acf_changed":false,"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"set","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}}},"tags":[],"member-author":[113],"project":[],"publication-type":[174],"publication-year":[123],"research-theme":[186],"class_list":["post-5024","publication","type-publication","status-publish","format-standard","hentry","member-author-e-somanathan","publication-type-article","publication-year-123","research-theme-climate"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/publication\/5024","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/publication"}],"about":[{"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/types\/publication"}],"version-history":[{"count":1,"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/publication\/5024\/revisions"}],"predecessor-version":[{"id":5025,"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/publication\/5024\/revisions\/5025"}],"wp:attachment":[{"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/media?parent=5024"}],"wp:term":[{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/tags?post=5024"},{"taxonomy":"member-author","embeddable":true,"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/member-author?post=5024"},{"taxonomy":"project","embeddable":true,"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/project?post=5024"},{"taxonomy":"publication-type","embeddable":true,"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/publication-type?post=5024"},{"taxonomy":"publication-year","embeddable":true,"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/publication-year?post=5024"},{"taxonomy":"research-theme","embeddable":true,"href":"https:\/\/www.isid.ac.in\/~cecfee\/wp-json\/wp\/v2\/research-theme?post=5024"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}