Policy-Induced Technology Adoption: Evidence from the Us Lead Phasedown

RFF Discussion Paper No. 01-14

40 Pages Posted: 27 Jan 2003

See all articles by Suzi Kerr

Suzi Kerr

Motu Economic and Public Policy Research Trust

Richard G. Newell

Duke University - Nicholas School of Environment; National Bureau of Economic Research (NBER); Resources for the Future

Date Written: May 2001

Abstract

Theory suggests that economic instruments, such as pollution taxes or tradable permits, can provide more efficient technology adoption incentives than conventional regulatory standards. We explore this issue for an important industry undergoing dramatic decreases in allowed pollution-the U.S. petroleum industry's phasedown of lead in gasoline. Using a duration model applied to a panel of refineries from 1971-1995, we find that the pattern of technology adoption is consistent with an economic response to market incentives, plant characteristics, and alternative policies. Importantly, evidence suggests that the tradable permit system used during the phasedown provided incentives for more efficient technology adoption decisions.

Keywords: technology, adoption, diffusion, environment, regulation, lead, gasoline,tradable permit, incentive-based policy

JEL Classification: C41, L71, O31, O33, Q28, Q48

Suggested Citation

Kerr, Suzi and Newell, Richard G., Policy-Induced Technology Adoption: Evidence from the Us Lead Phasedown (May 2001). RFF Discussion Paper No. 01-14. Available at SSRN: https://ssrn.com/abstract=366280 or http://dx.doi.org/10.2139/ssrn.366280

Suzi Kerr

Motu Economic and Public Policy Research Trust ( email )

Level 1, 93 Cuba Street
P.O. Box 24390
Wellington, 6142
New Zealand
+64 4 383 4250 (Phone)
+64 4 383 4270 (Fax)

Richard G. Newell (Contact Author)

Duke University - Nicholas School of Environment ( email )

Box 90228
Durham, NC 27708-0328
United States
919-681-8865 (Phone)

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Resources for the Future ( email )

1616 P Street, NW
Washington, DC 20036
United States

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