FEEM working papers "Note di lavoro" series
2003 .048

The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing


Authors: Robert N. Stavins, Lori Snyder, Nolan Miller
Series: Climate Change and Sustainable Development
Editor: Carlo Carraro
Type: Journal
Keywords: Regulation,Technological change,Environment,Hazard model
JEL n.: Q20,Q28,L50,L65
JEL: American Economic Review

Abstract

We use a hazard model to estimate the effect of environmental regulation on the diffusion of membrane cell production technology in the chlorine manufacturing industry. We estimate the effect of regulation on both the adoption of the membrane technology at existing plants and on the exit of existing plants using older technologies. We find that environmental regulation did affect the diffusion of the cleaner technology in the chlorine industry. However, it did so not by encouraging the adoption of membrane cells by existing facilities, but by reducing the demand for chlorine and hence encouraging the shutdown of facilities using the environmentally inferior options.

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