Policy for the adoption of new environmental monitoring technologies to manage stock externalities

Katrin Millock (1, 2) , Angels Xabadia (3) , David Zilberman (4)

1 CES - Centre d'économie de la Sorbonne
2 PSE - Paris School of Economics
3 Department of Economics
4 ARE - Department of Agricultural and Resource Economics [Berkeley]

With the development of modern information technologies, relying on nanotechnologies and remote sensing, a number of systems can be envisaged that allow for monitoring of the negative externalities generated by producers, consumers or travelers - road pricing schemes or individual emission meters for automobiles are two examples. We analyze a dynamic model of stock pollution when the regulator has incomplete information on emissions generated by heterogeneous agents. Our contribution is to explicitly study a decentralized policy for adoption of monitoring equipment over time. We determine second-best tax rates, the pattern of monitoring technology adoption, and identify conditions for the voluntary diffusion of monitoring technologies over time. Simulations show the welfare gains compared to alternative policies.

Mots clés: nanotechnologies; stock pollution; diffusion; externalities; environmental taxation; monitoring technology adoption

Domaines: Economies et finances; Environnement et Société

Katrin Millock, Angels Xabadia, David Zilberman. Policy for the adoption of new environmental monitoring technologies to manage stock externalities. Journal of Environmental Economics and Management, 2012, 64 (1), pp.102-116. ⟨10.1016/j.jeem.2012.02.004⟩. ⟨halshs-00704272⟩