The objective of the research project is to describe how firms's production and innovation decisions respond to environmental policy measures and evaluate the effectiveness of such measures.
The research project relies on recent developments in game theory and the theory of industrial organization. The research has an international dimension and focuses on environmental innovation.
The model includes:
i) an international industry made up of polluting oligopolists;
ii) an assumption that the regulator knows less about possible abatement options than the regulated;
iii) a description of how international policy cooperation can take place and the likelihood that it can be enforced.
The model is used to analyze different policies to promote environmental innovation in Europe. In particular, the analysis of unilateral and coordinated environmental innovation policies helps the understanding of the role of different policy measures and their varying impact in different European countries.
Funding SchemeCSC - Cost-sharing contracts