气候变化领域集成服务门户(CCPortal): Environmental Regulation Design: Motivating Firms' Clean Technology Investments With Penalties and Subsidies

CCPortal

DOI	10.1177/10591478231224911
	Environmental Regulation Design: Motivating Firms' Clean Technology Investments With Penalties and Subsidies
	Mohammadi, Mina; Heese, H. Sebastian; Kraft, Tim
发表日期	2024
ISSN	1059-1478
EISSN	1937-5956
起始页码	33
结束页码	1
卷号	33 期号:1
英文摘要	The recently enacted Inflation Reduction Act (IRA) includes a number of incentive-based programs (e.g., tax credits) designed to motivate firms to develop new clean technologies for fighting climate change. However, the IRA also includes a fee firms incur for excessive methane emissions. This represents the first time the United States government has ever levied a fee on greenhouse gas emissions, and it raises an interesting research question-how should a budget-constrained regulator balance the use of both incentive and penalty-based levers for stimulating investment in clean technology development? In this paper, we examine a regulator's optimal penalty and subsidy decisions for motivating firms to invest in clean technology development. We illustrate how the level of competitive intensity in the market can influence a budget-constrained regulator with multiple competing objectives-the environment, firm profits, and consumer welfare. We find that a subsidy is always beneficial, irrespective of the regulator's objective. While imposing a firm penalty always benefits the environment, it always negatively impacts the sum of firm profits and consumer welfare. However, depending on the level of competition in the market, instances can occur where imposing a high penalty actually benefits total firm profits or consumer welfare (separately). Interestingly, a regulator that cares about all three dimensions of its objective equally, should always set the penalty to either its minimum or maximum value, depending on whether the environmental cost of the harmful product is high or low.
英文关键词	Sustainability; regulation; penalty; subsidy; technology investment; competition
语种	英语
WOS研究方向	Engineering ; Operations Research & Management Science
WOS类目	Engineering, Manufacturing ; Operations Research & Management Science
WOS记录号	WOS:001224926800001
来源期刊	PRODUCTION AND OPERATIONS MANAGEMENT
文献类型	期刊论文
条目标识符	http://gcip.llas.ac.cn/handle/2XKMVOVA/298072
作者单位	North Carolina State University
推荐引用方式 GB/T 7714	Mohammadi, Mina,Heese, H. Sebastian,Kraft, Tim. Environmental Regulation Design: Motivating Firms' Clean Technology Investments With Penalties and Subsidies[J],2024,33(1).
APA	Mohammadi, Mina,Heese, H. Sebastian,&Kraft, Tim.(2024).Environmental Regulation Design: Motivating Firms' Clean Technology Investments With Penalties and Subsidies.PRODUCTION AND OPERATIONS MANAGEMENT,33(1).
MLA	Mohammadi, Mina,et al."Environmental Regulation Design: Motivating Firms' Clean Technology Investments With Penalties and Subsidies".PRODUCTION AND OPERATIONS MANAGEMENT 33.1(2024).