We show that for a broad class of technologies the relationship between policy stringency and the rate of technology adoption is inverted U-shaped. This happens when the marginal abatement cost (MAC) curves of conventional and new technologies intersect, which invariably occurs when emissions...

In this paper we survey the theoretical literature on both pollution-reducing and resource-saving technological progress. The literature can be divided into two strands. One strand deals with microeconomic models which investigate incentives to adopt and to develop environmentally more friendly...

We investigate the interplay between environmental policy, incentives to adopt new technology, and repercussions on R&D. We study a model where a monopolistic upstream firm engages in R&D and sells advanced abatement technology to polluting downstream firms which are subject to regulation. We...