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In den kommenden Jahrzehnten wird der Klimawandel eine der größten Herausforderungen für die österreichische und europäische Wirtschaft darstellen. Zwar kann die österreichische Wirtschaft bereits als überdurchschnittlich energieeffizient bezeichnet werden, jedoch besteht die Notwendigkeit, CO2-Emissionen durch Investitionen und insbesondere Innovationen zu reduzieren. Darüber hinaus ist es aus geopolitischer Sicht wünschenswert, die Abhängigkeit von etwa russischen Gasimporten nicht durch weitere Abhängigkeiten zu ersetzen - wie etwa bei den Importen der Solarkomponenten, wo China nahezu Monopolposition genießt. Demnach ist der Ausbau von eigenen, europäischen Technologien ein zentrales Element, um Resilienz und Diversifizierung der Versorgung zu erreichen. Zu erwähnen ist auch, dass in Österreich verglichen zu anderen europäischen Ländern nur ein sehr geringer Anteil des BIP, der in Risikokapital investiert wird, von den Pensionskassen stammt. Dieser Beitrag beschäftigt sich mit der Frage, inwiefern Risikokapital, einen Beitrag zur Entwicklung grüner Technologien in Europa und Österreich leisten kann. Aufgrund der Besonderheiten der "Cleantech"-Branche ist eine Kooperation zwischen privater und öffentlicher Hand unabdingbar. Wir schlagen folgende Maßnahmen vor: 1. Sicherung der Nachfrage nach Grünen Technologien, um höhere Renditen und niedrigere Risiken für Kapitalgeber zu gewährleisten. 2. Verbesserung der Rahmenbedingungen für Risikokapitalgeber etwa durch eine Reform der Mitarbeiterbeteiligung oder der Besteuerung von Carried Interest. 3. Entwicklung von Spin-Off Strategien, die sich an Best Practices innerhalb Europas orientieren. 4. Indirekte (hybride) öffentliche Risikokapitalfinanzierung durch Dachfondsmodelle. 5. Öffentliche Kofinanzierung der Risikokapitalinvestitionen unter Beibehaltung der privaten Risikoprofile und marktüblichen Konditionen, um so Verzerrungen am Markt zu verhindern. 6. Ausbau der kapitalgedeckten Altersvorsorge, um somit auch Pensionskassen zu veranlassen künftig höhere Summen in Risikokapital zu investieren.

Environmental investments, such as emission control measures hardly gain profit but are enforced by policy. Such investments can be expected to be delayed as much as legally feasible. Yet, if increasing expenditures for the same investment in the future are likely to occur, an advanced investment may be favorable. A cost calculation methodology for NOₓ control techniques and a real option based decision support model for investments not gaining economic profit is presented in the book.

The Clean Development Mechanism established under the Kyoto Protocol allows industrialized Annex I countries to offset part of their domestic emissions by investing in emissions-reduction projects in developing non-Annex I countries. Computable general equilibrium analysis of the Clean Development Mechanism's impacts so far mimics the Clean Development Mechanism as a sector emissions trading scheme, thereby overstating its potential to save climate change mitigation costs. This study develops a novel approach that represents the Clean Development Mechanism more realistically by compensating Clean Development Mechanism implementing sectors for additional abatement cost and by endogenizing Clean Development Mechanism credits as a function of investment. Compared with previous representations, the proposed approach is more consistent in its incentive structure and investment characteristics at the sector level. An empirical application of the new methodology demonstrates that the economy-wide cost savings from the Clean Development Mechanism tend to be lower than suggested by conventional modeling approaches while Clean Development Mechanism implementing sectors do not lose in output.

This paper analyzes the dynamic incentives for technology adoption under a transferable permits system, which allows for strategic trading on the permit market. Initially, firms can both invest in low-emitting production technologies and trade permits. In the model, technology adoption and allowance prices are generated endogenously and are inter-dependent. It is shown that the non-cooperative permit trading game possesses a pure-strategy Nash equilibrium, where the allowance value reflects the level of uncovered pollution (demand), the level of unused allowances (supply), and the technological status. These conditions are also satisfied when a price support instrument (dubbed European-cash-for-permits), which is contingent on the adoption of the new technology, is introduced. Numerical investigation confirms that this policy generates a floating price floor for the allowances, and it restores the dynamic incentives to invest. Given that this policy comes at a cost, a criterion for the selection of a self-financing policy (based on convex risk measures) is proposed and implemented.

We examine the determinants of firm's current environmental expenditure and firm's capital investment in equipment for pollution control using a Heckman selection model. As regards current environmental expenditure, we find that larger, exporting firms and firms subject to the Integrated Pollution Prevention and Control directive are more likely to spend resources at all. Once the decision to commit resources has been taken, larger firms, firms that are foreign-owned, and firms that report low shares of water and refuse charges in turnover have higher absolute levels of environmental expenditure. With respect to investment in equipment for pollution control, we find that energy intensive and exporting firms are more likely to invest at all. Once the decision to invest has been taken, larger firms and firms that report high water and refuse charges invest more in equipment for pollution control. This suggests that the firms for whom environmental concerns are most costly in terms of production and image do most to address them.

This paper investigates the economic incentives of countries to cooperate on international adaptation financing. Adaptation is generally implicitly incorporated in the climate change damage functions as used in Integrated Assessment Models. We replace the implicit decision on adaptation with explicit adaptation in a multi-regional setting by using an adjusted RICE model. We show that making adaptation explicit will not affect the optimal mitigation path when adaptation is set at its optimal level. Sub-optimal adaptation will, however, change the optimal mitigation path. Furthermore this paper studies for different forms of cooperation what effects international adaptation transfers will have on (i) domestic adaptation and (ii) the optimal mitigation path. Adaptation transfers will fully crowd out domestic adaptation in a first best setting. Transfers will decrease overall mitigation in our numerical simulations. An analytical framework is used to analyse the most important mechanisms and a numerical model is used to assess the magnitude of effects.

The ongoing global financial crisis has been preceded by a steady rise in global current account imbalances. Recently, in the course of the global recession, global imbalances have declined, albeit without having disappeared completely. As the outlook for global growth gets brighter, it is important to be aware of the possibility of again arising global imbalances in the future, since many of the structural reasons for the foregoing build up of imbalances remain largely in place. This is particularly important against the background of a close relationship between the global imbalances and the financial crisis. Important steps that would help to avoid the reoccurrence of unsustainable global imbalances and contribute to stabilize the global economy in the medium run are a tighter regulation of financial markets, the strengthening of the role of the IMF in monitoring global capital markets, and the development of social security systems and financial markets in emerging economies.

This paper is motivated by the observation that there is a difference between the time paths of damage valuations for invasions which affect agricultural compared with environmental systems. In particular, unlike agricultural systems, studies have shown that the social valuation of an environmental system is likely to be exponentially positively related to the extent of its deterioration. This paper explores the implications of this difference in determining biosecurity investment priorities. It is concluded that because of this difference an environmental system will often not be prioritised for such protection over an agricultural system even though its ultimate social value exceeds that of the agricultural system.

We present an OLG model in which life expectancy and environmental quality dynamics are jointly determined. Agents may invest in environmental care, depending on how much they expect to live. In turn, environmental conditions affect life expectancy. As a result, our model produces a positive correlation between longevity and environmental quality, both in the long-run and along the transition path. Eventually, multiple equilibria may also arise: some countries might be caught in a low-life-expectancy / low-environmental-quality trap. This outcome is consistent with stylized facts relating life expectancy and environmental performance measures. We also discuss the welfare and policy implications of the intergenerational externalities generated by individual choices. Finally, we show that our results are robust to the introduction of growth dynamics based on physical or human capital accumulation.

We analyze the productivity effects of environmental (green) investment as well as of environmental expenditures and energy expenditures. For this purpose, we follow a production function approach where we account for these investment and expenditure categories as inputs. Based on a panel dataset for the German manufacturing industry between 1996 and 2002 we find that both environmental and energy expenditures do not contribute to production growth. In contrast, environmental investment positively impinges upon production growth as a productivity driver. We thus conclude that environmental regulation should stimulate investment in order to be compatible with economic goals such as productivity.

We analyze the effects of socially responsible investment and public abatement on environmental quality and the economy in a continuous-time dynamic growth model featuring optimizing households and firms. Environmental quality is modelled as a renewable resource. Consumers can invest in government bonds or firm equity. Since investors feel partly responsible for environmental pollution when holding firm equity, they require a premium on the return to equity. We show that socially responsible investment behaviour by households partially offsets the positive effects on environmental quality of public abatement policies.

We consider the application of self-financing tax/subsidy mechanisms in environmental regulation and explore the question whether these mechanisms yield strong investment incentives in a market with many firms under Cournot competition. It turns out that the tax/subsidy mechanism with the announcement of the subsidy rate and the tax/subsidy mechanism with the announcement of the tax rate work for an arbitrary number of firms, which means that they yield strong incentives for investing in environmentally friendly technologies. The announcement of the subsidy rate is preferable for solving hold-up problems.

We evaluate the allocation rationality and ex ante cost efficiency of a major Swedish investment subsidy program, the “Local Investment Program” (LIP). The LIP, effective between 1998-2002, had dual purposes: to step up the pace at which Sweden transforms into an ecologically sustainable society and to reduce unemployment. During the program period, more than 6.2 billion Swedish kronor (approximately Euro 670 million) were granted to different municipal projects. By using data on the projects’ subsidies and anticipated environmental and employment effects, we find that these effects to a high degree explain the magnitude of the subsidy granted. We find that the marginal LIP subsidy for carbon dioxide (CO2) reductions does not vary significantly over the projects, implying that the LIP was cost efficient for such reductions. Furthermore, for a majority of the projects, the marginal subsidy for CO2 reductions was lower than the, at the time, prevailing CO2 tax. Assuming successful project fulfillment, we conclude that the LIP was a low cost, cost efficient environmental policy for reducing CO2 emissions provided that the projects generate spillover effects large enough to justify the subsidy.

In this paper I extend the well known result that a hyperbolically discounting agent postpones costs into the future. If society has hyperbolic inter-temporal preferences, it may be optimal from an ex ante point of view to postpone structural change from a polluting to a non polluting production sector into the future (ex ante procrastination). The consequences of ex ante procrastination are discussed for three different behavioral patterns. I show that, depending on the assumed behavioral regime, ex ante procrastination may lead to ex post procrastination, i.e. de facto no investment in the non polluting sector is undertaken over the whole time horizon, although investment was optimal from an ex ante point of view. Furthermore, the ex post implemented investment plan may be inefficient if it is not dictatorial. Hence, in the case of hyperbolic preferences there is a potential trade-off between inter-temporal efficiency and equity.

This paper analyzes stochastic productive pollution within a model of endogenous growth. The extent to which the agents perceive their individual influence on aggregate pollution is parameterized. Recursive preferences allow for the separation between intertemporal substitutability and risk aversion. Two different environmental policy regimes are distinguished: A stochastic pollution tax, which is uncorrelated with the technological uncertainty of pollution, is compared with a pure deterministic tax regime. The impact of the stochastic pollution tax on abatement effort and growth is ambiguous and depends on the parameter setting. Nevertheless, it is shown, that for a sufficiently high volatility of the pollution tax, the induced rise in uncertainty associated with pollution leads to an increase in abatement activities and therefore supports the corresponding deterministic environmental policy. Der vorliegende Beitrag analysiert die Auswirkungen stochastischer Umweltsteuern auf das dynamische Gleichgewicht einer Volkswirtschaft. Es liegt eine Produktionstechnologie zugrunde, in der die Umweltverschmutzung ein essentieller Produktionsfaktor ist und das Ausmaß der mit der Produktion verbundenen Umweltzerstörung einem stochastischen Prozeß unterliegt. Der individuelle Einfluss auf die Umweltverschmutzung wird von den Haushalten nur teilweise wahrgenommen. Es wird gezeigt, dass die internalisierende Wirkung deterministischer Umweltabgaben von einer stochastischen Umweltsteuer unterstützt wird, falls die Volatilität dieser Steuer hinreichend hoch ist. Die Auswirkungen einer stochastischen Umweltabgabe sind jedoch nicht eindeutig: insbesondere bei geringer Volatilität kann sie auch zu einer Senkung der Umweltschutzausgaben führen.

This paper analyzes environmental expenditures in Indonesia – a significant newly industrializing economy – reported at the plant level comprising all 23 thousand manufacturing establishments with more than 20 employees. Since compliance is barely enforced, pollution abatement expenditures are effectively voluntary in nature. This allows us to test whether foreign owned firms expend more due to a technology that adheres to stricter Western standards or whether the predominant effect is that both foreign and domestic exporting companies are more environmentally conscious due to better technology transfer or green consumerism in the Western countries. If so, this would contradict conventional wisdom that environmental expenditures reduce competitiveness and that increased levels of foreign direct investment or export-orientation in manufacturing will necessarily pre-empt firms from behaving in a ?greener? fashion.

In this paper, we study a firm's optimal lobby behavior and its effect on investment in pollution abatement capital. We develop a dynamic framework where a representative firm can invest in both abatement and lobby capital in response to a possible future increase in pollution tax. We show that when the firm lobbies against the scale of the tax increase at a predetermined date, it should act like an occasional lobbyer by investing a lump-sum (optimal) amount in the lobby capital only at that date. But, to delay the new tax, it should act like a habitual lobbyer by investing continuously and at increasing rates over an optimal time period. We show that lobby expenditure crowds out investment in abatement capital and that this effect is stronger the more efficient is the lobbying activity. Further, we show that while uncertainty about the magnitude of the tax reduces the firm's incentive to lobby, uncertainty about the timing of the new tax increases it.

Market-based instruments are believed to create more efficient incentives for firmsto adopt new technologies than command-and-control policies. We compare the effects of a directtechnology regulation and of an adoption subsidy under asymmetric information about the costsof technological advances in pollution control. We show that the policy maker may want tocommit to her policy. The reason is that uncertainty about adoption costs induces the policymaker to set subsidy levels that increase over time; firms, expecting higher subsidies in thefuture, postpone investment. Direct regulation offers a commitment possibility that allows toprevent firms from postponing investment.

International climate policy has assigned the leading role in emissions abatement to the industrialized countries while developing countries remain uncommitted to binding emission reduction targets. However, cooperation between the industrialized and the developing world through joint implementation of emission abatement promises substantial economic gains to both parties. In this context, the policy debate on joint implementation has addressed the question of how investment risks to project-based emission crediting between industrialized countries and developing countries affect the magnitude and distribution of such gains. In our quantitative analysis, we find that the incorporation of country-specific investment risks induces rather small changes vis-à-vis a situation where investment risks are neglected. Only if investors go for high safety of returns is there a distinct decline in the overall volume of emission crediting and the associated total economic benefits. While the welfare effects of risk incorporation for industrialized countries are unequivocally negative, the implications across developing countries are ambiguous. Whereas low-risk developing countries attract higher project volumes and benefit from higher effective prices per emission credit compared to a reference scenario without risk, the opposite applies to high-risk countries. Sensitivity analysis with respect to higher risk estimates show that shifts in the comparative advantage of emission abatement against high-risk countries may become dramatic as only very low-cost mitigation projects will be realized, driving down the country’s benefits from emission crediting to the advantage of low-risk developing countries. This result is supported by empirical evidence on regional imbalances of activities implemented jointly under the pilot phase of the Kyoto Protocol.

In diesem Papier wird untersucht, ob bzw. wie sich im Rahmen des Kyoto Protokolls die globalen Emissionsreduktionsziele mit der ökonomischen Rationalität der beteiligten Länder in Einklang bringen lassen. Den äußeren Rahmen der Analyse bildet eine spieltheoretische Darstellung der Kooperationsprobleme souveräner Nationalstaaten im Bereich des internationalen Klimaschutzes. Im Mittelpunkt der ausführlichen wohlfahrtsökonomischen Analyse stehen die Funktionsweise und die Rolle der flexiblen Instrumente des Kyoto Protokolls, insbesondere des Emissionsrechtshandels und des Clean Development Mechanism. Die flexiblen Mechanismen stellen eine notwendige Bedingung für die Existenz des Abkommens dar. Sie verbessern die Kosteneffizienz der notwendigen Emissionsreduktionen und bieten daher Anreize für kooperatives Verhalten der Länder. Problematisch ist allerdings, dass die Koalitionäre nicht bereit sind, einen Teil ihres Effizienzgewinns zugunsten nicht-ökonomischer Ziele zu opfern. Ihr Streben nach kurzfristiger Kosteneffizienz führt zu einer sehr begrenzten ökologischen Effektivität des Kyoto Protokolls und verhindert eine zukünftige Erweiterung der Klimakoalition. Generell sind die Bestimmungen des Protokolls durchaus geeignet, vorteilhafte dynamische Rahmenbedingungen für einen weltweiten Lernprozess der Emissionsvermeidung zu schaffen. Eine nachhaltige Lösung des Klimaproblems kann jedoch nur durch eine erhöhte Zahlungsbereitschaft seitens der Industrie- und Transformationsländer erreicht werden.

The Clean Development Mechanism of the Kyoto Protocol could create a great chance for developing countries to profit from projects that reduce greenhouse gas emissions and improve the economic and environmental situation in the host country. The project cycle for the CDM differs from a usual investment project due to the need to develop a baseline for the calculation of emission reductions, registration by a national CDM body and monitoring and verification of the emission reduction by an independent entity. Before a project can be registered, its eligibility has to be checked. This means that it has to fulfil the international and national CDM criteria. We suggest national criteria concerning the CDM component, adherence to national policy goals, technological aspects, attractiveness for investor and host enterprise as well as avoidance of negative externalities. A set of sustainable development indicators is proposed for Uzbekistan. We then look at each step of project preparation and concentrate on baseline determination, using small hydropower stations in the Uzbek irrigation system as case studies. Determination of system boundaries, leakage and the lifetime of the projects are assessed. Different benchmarks for the Uzbek electricity sector are calculated. We calculate the economic attractiveness of three hydro power stations to determine whether the investment is really additional, using different discount rates and electricity price scenarios. In all scenarios we find positive costs, making the projects additional. Der Mechanismus für umweltverträgliche Entwicklung (CDM) des Kyoto-Protokolls eröffnet für Entwicklungsländer eine große Chance, von Projekten zu profitieren, die gleichzeitig Treibhausgasemissionen senken und die Lage der Ökonomie und Umwelt im Gastland verbessern. Der Projektzyklus eines CDM-Projekts unterscheidet sich von einer herkömmlichen Investition dadurch, dass ein Referenzfall für die Berechnung der Emissionsverringerung aufgestellt werden muss, das Projekt bei einer nationalen CDMAgentur angemeldet werden muss und eine Überprüfung und unabhängige Kontrolle der Emissionsverringerung erforderlich ist. Bevor ein Projekt angemeldet werden kann, muss geprüft werden, ob es überhaupt zulässig ist. Das bedeutet, das es die internationalen und nationalen CDM-Kriterien erfüllen muss. Wir schlagen nationale Kriterien bezüglich der CDM-Komponente, der Förderung nationaler Politikziele, technologischer Aspekte, Attraktivität für Investor und Gastfirma sowie Vermeidung negativer Externalitäten für Usbekistan vor. Wir betrachten dann die verschiedenen Schritte der Projektvorbereitung und konzentrieren uns dabei auf die Referenzfallbestimmung anhand von Kleinwasserkraftwerken im usbekischen Bewässerungssystem. Die Bestimmung der Systemgrenzen, indirekter Effekte und der Lebensdauer der Projekte werden diskutiert. Unterschiedliche Standard- Emissionsfaktoren für den usbekischen Stromsektor werden berechnet. Wir analysieren die ökonomische Attraktivität dreier Kleinwasserkraftwerke, um zu bestimmen, ob eine derartige Investition wirklich zusätzlich ist. Dabei werden unterschiedliche Diskontierungsraten und Strompreisentwicklungen berücksichtigt. In allen Szenarien kommen wir zu positiven Kosten, was bedeutet, dass die Investitionen zusätzlich wären.

The US decision not to ratify the Kyoto Protocol and the recent outcomes of the Bonn and Marrakech Conferences of the Parties have important implications for both the effectiveness and the efficiency of future climate policies. Among these implications, those related with technical change and with the functioning of the international market for carbon emissions are particularly relevant, because these variables have the largest impact on the overall abatement cost to be borne by Annex B countries in the short and in the long run. This paper analyses the consequences of the US decision to withdraw from the Kyoto/Bonn Protocol both on technological innovation and on the price of emission permits (and, as a consequence, on abatement costs). A first goal is to assess the impact of the US defection on the price of permits and compliance costs when technological innovation and diffusion is taken into account (the model embodies international technological spillovers). A second goal is to understand for what reasons in the presence of endogenous and induced technical change the reduction of the price of permits is lower than in most empirical analyses recently circulated. A third goal is to assess the role of Russia in climate negotiations, its increased bargaining power and its eventual incentives to follow the US defections.

The environmental integrity of the CDM under the Kyoto Protocol depends on the possibility to avoid giving emission credits to projects that would have happened anyway. Whether and how ?Investment Additionality? of CDM projects has to be determined is currently part of climate negotiations. We discuss the rationale of companies to invest in projects and analyse possible criteria to determine Investment Additionality from a theoretical point of view. A number of case studies is used to show the implications of the different criteria. The use of a single criterion is not possible, especially due to the importance of non-monetary barriers. However, some criteria are better than others. Moreover, the institutional framework for the selection and application of criteria is very important. Concluding, we suggest a combination of a threshold Internal Rate of Return with a risk factor as primary criterion. To take nonmonetary barriers into account, additional criteria could be used such as the existence of similar privately financed projects in the host country. If no explicit criterion is politically feasible, stringent baseline methodologies could at least capture some aspects of Investment Additionality. Die umweltpolitische Integrität des im Kyoto-Protokoll verankerten CDM hängt davon ab, ob Projekte, die ohnehin stattgefunden hätten, Emissionsgutschriften erhalten können. Ob und wie die ?Zusätzlichkeit der Investition? nachgewiesen werden muss, ist derzeit Bestandteil der Klimaverhandlungen. Wir diskutieren die Entscheidungsgründe, die Firmen zu Investitionen in Projekte bewegen und analysieren mögliche Kriterien für die Bestimmung der Zusätzlichkeit aus einer theoretischen Perspektive. Darüber hinaus werden Fallstudien zur Untersuchung der Auswirkungen der verschiedenen Kriterien herangezogen. Sie zeigen, dass die generelle Beschränkung auf ein einzelnes Kriterium nicht möglich ist. Jedoch sind einige Kriterien besser als andere. Außerdem sind die institutionellen Rahmenbedingungen für die Auswahl und Anwendung der Kriterien sehr wichtig. Zusammenfassend befürworten wir die Kombination eines Schwellenwerts für die interne Ertragsrate mit einem Risikofaktor. Um nicht-monetäre Hindernisse zu berücksichtigen, können zusätzliche Kriterien wie die Existenz von ähnlichen, privat finanzierten Projekten im Gastland überprüft werden. Wenn kein derartiges Kriterium politisch durchsetzbar ist, können strenge Regeln für die Referenzfallbestimmung zumindest einige Aspekte der Zusätzlichkeit einfangen.

The paper explores abatement investment and location responses to environmental policy, which takes the form of emission taxes or tradable emission permits and subsidies against the costs of abatement investment, under uncertainty and irreversibility. Uncertainty is associated with output price, environmental policy parameters, or technological parameters. Irreversibility is related to abatement expenses, and movements to a new location. Uncertainty is modelled by Itô stochastic differential equations, and the problem is analysed by using optimal stopping methodologies. Continuation intervals during which firms do not engage in abatement investment or relocate and intervals during which firms take the irreversible decision of undertaking abatement expenses or relocating are defined. Free boundaries are characterised for a variety of cases that include output price uncertainty, policy uncertainty expressed both in terms of continuous fluctuations of permit prices and unpredictable policy changes, and combined policy and technological uncertainty. An optimal environmental policy is defined as the combination of policy parameters that makes the free boundary corresponding to the profit maximisation problem coincide with the free boundary corresponding to a social optimisation problem.

International climate protection investments (Joint Implementation and Clean Development Mechanism projects) are burdened with problems of contract enforcement, which prevent the realisation of efficiency gains associated with these investments. The paper analyses this problem from the perspective of non-cooperative game theory and proposes two different solutions to the co-operation problem. The first analyses the potential role of national environmental authorities in facilitating credible commitment of the project host operating under its jurisdiction. It is argued that the threat of punishing the project host if he breaches the contract may serve this purpose. The effective level of punishment is derived. The second option involves strategic delegation of contract implementation to a third party operating under the same jurisdiction as the project host. Again, the paper explores the conditions that ensure incentive-compatibility. Both options are based on the idea that the project sponsor may commit himself credibly by becoming a Stackelberg leader.

Environmental policy instruments have an impact on the incentives to invest in environmental R&D and this link should deserve careful consideration when introducing new instruments. Some authors argue that environmental taxes and tradable permits have rather comparable impacts on environmental R&D but we think that only very specific conditions do lead to this kind of conclusion. If we broaden the perspective by integrating elements from the Industrial Organisation literature and depart for Pigouvian settings, a market-driven approach would link the incentive to invest in new technologies to the market potential offered by the policy instruments. If taxes turn out to be very expensive for the polluting or emitting industries, we can assume that these targeted firms would be more interested to invest in new - emission reducing - technologies than in cases where the chosen policy instrument will lead to a very limited cost. We therefore developed a dynamic model that enables to compare the incentives on environmental R&D resulting from taxes, emission trading, voluntary approaches and subsidising environmental R&D. We do not claim to capture all relevant market interactions, but our findings confirm the intuition that environmental taxes have a clearly different impact on environmental R&D compared to emission trading.

This paper investigates the effect of credibility of environmental policies on environmental innovation and welfare. When the government precommits to an emission tax, the monopolist's abatement effort is lower than if the environmental policy is at the government's discretion. Time consistent emission tax is lower than optimal emission tax under precommitment. Finally, welfare is always higher if the government can commit to an emission tax.

Inhalt: 1. Einleitung und Problemstellung 2. Grundlagen zum Verständnis 3. Bewertung von Energiesparmaßnahmen aus einzelwirtschaftlicher Sicht 4. Kostenaspekte der Treibhausgasminderung in Energiesystemanalysen 5. Gesamtwirtschaftliche Aspekte für Kosten-Wirksamkeitsanalysen 6. Querschnittsaspekte: Transaktions- und Programmkosten 7. Synopse der drei Analyseebenen 8. Empfehlungen für die Klimapolitik (Handlungsempfehlungen für die Klimapolitik, Strategie für die Forschungsförderung) Annex 1: Einzelwirtschaftliche Bewertungsverfahren an einem praktischen Beispiel Annex 2: Liberalisierung der Elektrizitätswirtschaft.

In a dynamic model of a risk-neutral competitive firm which can lower its pollution emissions per unit of output by building up abatement capital stock, we examine the effect of a higher pollution tax rate on abatement investment both under full certainty and when the timing or the size of the tax increase is uncertain. We show that a higher pollution tax encourages abatement investment if it does not exceed a certain threshold rate - a "Laffer-curve" phenomenon. When the size of the tax increase is uncertain, at the time of the tax increase the abatement investment path may shift upward or downward depending on whether the actual tax rate is higher or lower than the firm's expected rate. But, when the time of the tax increase is uncertain, the abatement investment path always jumps upward. Further, the ad hoc practice of raising the discount rate to account for the uncertainty leads to underinvestment in abatement capital. We show how the size of this underinvestment bias varies with the future tax increase. Finally, we show that a credible threat to accelerate the tax increase can induce the firm to undertake more abatement investment.