1. Interaction between public policies and technological competition under environmental risks
- Author
-
Jacques Lesourne, Gilbert Laffond, and François Moreau
- Subjects
Competition (economics) ,Intervention (law) ,Process (engineering) ,Survival of the fittest ,Public policy ,media_common.cataloged_instance ,Environmental impact assessment ,Business ,Environmental economics ,European union ,Environmentally friendly ,media_common - Abstract
This paper examines the interaction between two random processes: (1) a process of technological competition among several mature polluting technologies and a new technology which is environmentally friendly, but the cost of which depends on the adoption rate; (2) a random process of learning about the environmental impact of technologies by the public policy maker who may decide, according to the results, on taxation or prohibition of certain technologies. The ability of the public authorities to ensure the survival of the most environmentally friendly technology is analyzed. The role of various parameters is discussed, especially the interaction between the choice of risk thresholds which determine the intervention of public authorities (i.e. the implementation of the precaution principle) and the policy maker’s learning rate for environmental risks (i.e. the speed with which beliefs in risks regarding the most recent research results are adjusted). Some paradoxical effects arising from the implementation of the precaution principle on the survival of the most environmentally friendly technology are pointed out. The model illustrates problems encountered in practice like the choice of the European Union policy in the face of NOx emissions from cars.
- Published
- 2002
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