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Firms' and states' responses to laxer environmental standards.
- Source :
-
Journal of Environmental Economics & Management . Nov2019, Vol. 98, pN.PAG-N.PAG. 1p. - Publication Year :
- 2019
-
Abstract
- On June 1, 2017, President Trump announced the United States' withdrawal from the Paris agreement on climate change. Despite this decision, American firms continued investing in low-carbon technologies and some states committed to tougher environmental standards. To understand this apparent paradox, this paper studies how a weakening of environmental standards affects the behavior of profit-maximizing firms. It finds that a relaxation of emission standards (i) may increase firms' incentives to adopt clean technologies, but not to pollute less; (ii) may negatively affect industry profitability if it is perceived as temporary; and, when this is the case, (iii) the unilateral adoption of stricter standards by large states may increase the expected profitability of every firm. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 00950696
- Volume :
- 98
- Database :
- Academic Search Index
- Journal :
- Journal of Environmental Economics & Management
- Publication Type :
- Academic Journal
- Accession number :
- 141111403
- Full Text :
- https://doi.org/10.1016/j.jeem.2019.102275