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We consider the incentives of a single firm to invest in a cleaner technology under quotas and emission taxation. We assume asymmetric information about the firm's cost of employing the new technology. Policy is set either before the firm invests (commitment) or after (time consistency). Contrary to the conventional wisdom, we find that with commitment (time consistency), quotas give higher (lower) investment incentives than taxes. With quotas (taxes), commitment generally leads to higher (lower) welfare than time consistency. Under commitment with quadratic abatement costs and environmental damages, a modified Weitzman rule applies and quotas usually lead to higher welfare than taxes. [ABSTRACT FROM AUTHOR]

This paper therefore looks closer into climate gas emission and the shift to non-fossil energy in Sweden. What types of organizations are behind the shift to non-fossil energy use, what are the relative effects on emissions, to what extent can these interactive dynamics be considered eco-innovations? Do these effects vary between public and private organizations, and if so, can they be related to specific institutions and policies? Methods include statistical survival analyses, in particular Cox regression. These analyses inform us why energy sources shift. Results indicate that wood fuel and solid waste increase as sources of energy while fossil oil has decreased between 2003 and 2010. This result is in line with industrial and environmental policies of the Swedish governments that present these facts as institutionally and policy-related 'green innovation'. However, our analysis contests such a conclusion and it is noticed that the shift to non-fossil sources of energy has not led to verifiable decreases in green-house gas emissions. Results instead suggest that 'green' innovation of non-fossil energy was mostly the effect of low-tech innovation in public organizations with no fundamental effect on CO emissions. [ABSTRACT FROM AUTHOR]