The problem of intentional environmental harms is discussed as the combined consequence of limited liability laws and specific capital structures. When the conditions are “right”, then the option of planned liquidation is optimal for certain types of firms. These firms are typified by...

We study the optimal R&D trajectory in a setting where new technologies are never perfect backstops in the sense that there is no perfectly clean technology that eventually solves the pollution problem once and for all. New technologies have stings attached, i.e. each emits a specific stock...

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...