The present thesis extends the economic literature by introducing green horizontal innovation. Green horizontal innovation is characterized by new technologies that solve an existing pollution problem but give rise to a new one at the same time. A prominent example are CFCs that once replaced...

Voluntary opt-in programs to reduce emissions in unregulated sectors or countries have spurred considerable discussion. Since any regulator will make errors in predicting baselines and participants will self-select into the program, adverse selection will reduce efficiency and possibly...