structural causes and regime consequences regimes as intervening variables international regimes are defined as principles norms rules and decisionmaking procedures around which actor expectations converge in a given issue area as a starting point regimes have been conceptualized as intervening variables standing between basic causal factors and related outcomes and behavior there are three views about the importance of regimes conventional structural orientations dismiss regimes as being at best ineffectual grotian orientations view regimes as an intimate component of the international system and modified structural perspectives see regimes as significant only under certain constrained conditions for grotian and modified structuralist arguments which endorse the view that regimes can influence outcomes and behavior regime development is seen as a function of five basic causal variables egoistic self interest political power diffuse norms and principles custom and usage and knowledge

assessing and rationalizing the management of a portfolio of clean technologies experience from a french environmental fund and a world bank cleaner production demonstration project in china abstract industrial pollution is intrinsically linked to the adoption and development of technological alternatives environmental policies from regulation to economic instruments in industrialized nations as well as in developing countries and in transition economies cannot ignore the technological dimension when they aim at controlling or preventing the pollution generated by industrial activities the implementation of cleaner technologies has been examined here for a french environmental fund the water agency agence de l eau rhin meuse and for a world bank cleaner production demonstration project in china a three dimensional assessment methodology including 1 the level of innovation 2 the type of process targeted and 3 a process flow oriented categorization of technologies has been developed and has identified significant heterogeneity for the two venues using foster s theory on innovation s curves three kinds of interpretation are proposed to distinguish what is due to intrinsic differences existing between the various technological choices from what could be explained by resistance to change inside firms or to policy distortions thus this assessment focuses on evaluating the performance of financial assistance for furthering environmental policy identifying technological alternatives which should be particularly promoted and monitoring the evolution of the various technological choices over time

using a policy mix for pollution control a review of economic literature this article provides a review of economic studies analyzing the use of multiple policies a socalled policy mix to cope with single pollution problems to guide and structure the review an analytical framework is developed and applied the framework integrates transaction costs into the analysis of pollution problems and policies to overcome them moreover it understands a pollution externality not only as a market failure but more generally as the failure of private governance structures based on this insight two rationales for using a policy mix are identified first a policy mix may help to correct for multiple reinforcing failures of private governance structures such as pollution externalities and technological spillovers second a policy mix can be employed if the implementation of single first best policies brings about high transaction costs e g when marginal pollution damages are heterogeneous or polluters are unlikely to comply with the policy for each rationale the relevant literature is presented based on the review avenues for future research are identified

the role of transnational dimensions in emerging economy technological innovation systems for clean tech the technological innovation system tis framework and its system functions have become a popular analytical tool for the study of clean tech innovation there is increasing attention for the role of emerging economies in global clean tech innovation but the applicability of tis to emerging economies cases is not entirely straightforward a key issue is the limited geographical considerations in particular transnational dimensions in tis whereas earlier perspectives on innovation in emerging economies have stressed the role of such transnational dimensions this paper elaborates transnational tis actor networks and institutions categorizes these in relation to tis functions and describes their potential to induce or block tis development in emerging economies we draw on insights from the perspectives of national learning systems international technology transfer and global production networks for this purpose we conclude that the potential effects of these transnational dimensions may be accurately grasped by the existing list of system functions lending credence to its further application of the tis framework on emerging economy case studies policy makers in emerging economies should recognize these transnational dimensions and seek to optimize their potential effect on domestic tis development taking in to consideration a realistic assessment of its role in the global tis

demand pull technology push and government led incentives for non incremental technical change abstract rising expectations about future demand for new technologies increase the incentives for investments in innovation by enlarging payoffs to successful innovations how well does this notion of demand pull apply to non incremental technological change when demand is largely attributable to actions by governments in this case inventors of the most important inventions did not respond positively to strong demand pull policies filing of highly cited patents declined precipitously just as demand for wind power created a multi billion dollar market three explanations for this apparent inconsistency with the demand pull hypothesis played a role 1 the rapid convergence on a single dominant design limited the market opportunity for non incremental technical improvements 2 even though the policies implemented were stringent enough to stimulate demand uncertainty in their longevity dampened the incentives for inventions that were likely to take several years to pay off and 3 alternative explanations such as declining r d funding and weakening presidential engagement on energy appear to have been important

prospects for global market expansion of china s wind turbine manufacturing industry abstract emerging economies are increasingly contributing to global innovation including clean tech innovation the development of china s wind power sector has often been used to illustrate this point china s domestic wind power market is the largest in the world and is largely supplied by domestic manufacturers competition for market share in the domestic market may pressure firms to innovate which consecutively improves prospects for global expansion this paper reviews developments in china s domestic wind turbine market using the technological innovation system framework we analyze the pressure to innovate arising from market competition and assess the prospects for global expansion of chinese wind turbine manufacturers we conclude that domestic customers are not pressured or incentivized to perform with respect to power output such that turbine manufacturers are not pressured to perform with respect to turbine efficiency or maintenance needs pressure to innovate is further reduced by formalizing connections between wind farm developers and turbine manufacturers chinese turbine manufacturers cannot yet compete with leading global brands in technological leadership the prospects for exports are improved however by the preferential supply of project financing from institutional investors such as the china development bank from chinese utilities that seek global expansion and from the manufacturers themselves

handling financial resource mobilisation in technological innovation systems the case of chinese wind power to mitigate climate change a rapid and large scale expansion of sustainable innovations such as renewable energy technologies is crucial china s track record of wind power development shows both speed and scale that can provide valuable knowledge of how to stimulate and maintain transformation of energy systems the growth was made possible partly by ample access to financial capital however the rapid growth also led to growing pains and made the industry face increasing financial constraints while these constraints partly relate to structures and trends that are external to the wind power innovation system they were also a consequence of the particular path taken in chinese wind power development the case demonstrates that if a full fledged industry is to be developed and sustained a balanced growth is required and all innovation system functions need due attention sooner or later conceptually the article contributes by further exploring how mobilisation of financial resources affect and is affected by overall system dynamics

controlling stochastic pollution events through liability rules some evidence from ocs leasing under the ocs lands act firms are strictly liable for damages from oil spills to the extent that this liability rule causes firms to internalize environmental risks incentives for damage avoidance behavior are provided using data from the 1979 georges bank lease sale we use a robust estimation technique to test the hypothesis that potential environmental costs are reflected in bids for ocs leases the results indicate a substantial response to environmental risks recognizing reduced rents we estimate that total high bids have declined by 20 because of firms perceptions of environmental risks the results suggest that liability rules have considerable potential in controlling stochastic pollution events

an empirical oligopoly model of a regulated market abstract we model a three firm oligopoly the spanish fertilizer industry from 1976 to 1988 which was subject to price regulation in the form of price ceilings a theoretical and econometric model is developed in order to identify simultaneously the behaviour of the firms and the degree to which regulation constrained the price the collusive market sharing arrangements involving asymmetric firms and the less collusive outcomes of cournot and stackelberg together with their constrained counterparts are considered as particular behavioural hypotheses the estimation of an aggregated and a disaggregated version of the model by general method of moments techniques leads us to identify the regulation constrained stackelberg equilibrium as the most likely outcome given the observed data

renewable energy investment by the world bank world bank group lending for renewable energy accelerated in the 1990s and resulted in 17 approved projects with 700 million in bank loans and 230 million in grants by the global environment facility the bank s 1999 energy sector strategy fuel for thought charted new directions for renewable energy investment the present paper considers the implementation challenges of fuel for thought strategies and the opportunities for carrying them out the paper distinguishes between agendas in the energy and rural development sectors and reviews limitations to implementing these agendas lessons from projects are just emerging but suggest ve areas of support for renewable energy by the bank in the future renewable energy nancing electric power policy frameworks rural energy enterprises regulated rural energy concessions and domestic technology manufacturing interviews with the private sector suggest additional forms of support assist with business plans nance pre feasibility studies reduce commercial risks support joint ventures build market volume and stability and pilot and test innovative business models the e ectiveness of the bank in following through on its ambitious agenda fundamentally rests on the willingness and commitment of developing countries to pursue these strategies and the degree to which renewable energy applications are seen to serve countries development priorities 2001 elsevier science ltd all rights reserved

cost padding in regulated monopolies abstract this paper considers the regulated monopoly that pads or falsifies its costs to increase the cost reimbursement it receives from the regulator contrary to the standard literature on cost regulation the firm engages in cost reducing investment before it enters into a regulatory contract this pre contractual investment in cost reduction determines the firm type at the contracting stage the paper derives both the optimum incentive compatible falsification contract and the equilibrium type distribution with the distribution of cost types determined endogenously by the pre contractual investment choice an increase in the cost of falsification has two effects first there is a direct effect that reduces cost padding because it becomes more expensive to do so second there is an indirect effect that increases cost padding because the firm responds by choosing lower investments and lower investments are associated with more cost padding it is demonstrated that the direct effect will dominate and both expected levels of cost padding and expected costs for falsification will be reduced however the indirect effect increases real costs and despite the reduction in cost padding the net effect can reduce welfare it is determined that these conclusions are significantly different from those obtained when the distribution of cost types is exogenously fixed

the impact of deregulation on the production structure of the motor carrier industry empirical analysis of the motor carrier industry pre and post regulatory reform reveals that deregulation resulted in significant changes in firm production structure and lower real average costs translog cost functions for firms operating in 1977 and 1983 were estimated and compared for other specialized commodity carriers fitted average costs were computed from these functions the results indicate significant differences in the cost functions and real costs that cannot be attributed to technological changes but rather suggest efficiency gains the results also suggest that it is inappropriate to predict outcomes of deregulation using empirical analyses of firms in the regulated environment

environmental bonds and environmental research in innovative activities abstract this paper considers the incentive to uncover potential future social costs of activities having no historical precedents since ex ante markets in the future external effects of historically unique activities are non existent the private incentives to uncover the possibility of thalidomide type results in such activities is weak the paper discusses the value of sequentially determined environmental bonds as mechanisms for the generation of research funds in these cases and derives measures for the calculation of such bonds

the composition of foreign direct investment and protection of intellectual property rights evidence from transition economies while existing literature has examined the impact of intellectual property protection on the volume of foreign direct investment fdi little is known about its effect on the composition of fdi inflows the author addresses this question empirically using a unique firm level data set from eastern europe and the former soviet union she finds that weak protection deters foreign investors in technology intensive sectors that rely heavily on intellectual property rights the results also indicate that a weak intellectual property regime encourages investors to undertake projects focusing on distribution rather than local production the latter effect is present in all sectors not just those relying heavily on intellectual property protection

administrative costs and instrument choice for stochastic non point source pollutants this paper extends the empiricalanalysis of non point source pollution to thecase where the pollutant is stochastic andalternative regulatory instruments havedifferent administrative costs it also appliesa method of stochastic programming whereemissions are log normally distributed forthe kennet catchment in south west england werank a range of policies in terms of abatementcosts alone and total costs abatement andadministrative costs on the basis ofabatement costs alone a uniform emission taxis the cost minimising policy but on the basisof total cost a nitrogen input tax is theleast cost policy furthermore the policyranking based on total costs changes as thereliability standard increases

a comparative analysis of photovoltaic technological innovation systems including international dimensions the cases of japan and the netherlands this paper investigates the development and diffusion of photovoltaic pv technology in japan and the netherlands both cases are analysed with the technological innovation systems tis framework which focuses on a particular technology and includes all those factors that influence the development and diffusion of a technology this framework proposes seven system functions key processes that need to be fulfilled for a tis to function well we include international factors in the framework such as import share export activities foreign direct investment and international knowledge exchange japan is found to have a well functioning pv tis with a strong industry and a large market for pv whereas the dutch have so far established considerably less based on the differences in the cases we formulate a number of lessons for the dutch pv tis 1 system functions such as guidance of the search f4 and advocacy coalitions f7 need to be strengthened in order to reinforce each other in a positive way 2 formulate maintain and translate consistent long term goals into long term policies and stimulation measures in order to allow a gradual build up of networks and skills expertise 3 build up and maintain legitimacy within the institutional setting and 4 strengthen the tis in order for the smes to grow in terms of capital and capabilities

biofuels and the role of space in sustainable innovation journeys this paper aims to identify the lessons that should be learnt from how biofuels have been envisioned from the aftermath of the oil shocks of the 1970s to the present and how these visions compare with biofuel production networks emerging in the 2000s working at the interface of sustainable innovation journey research and geographical theories on the spatial unevenness of sustainability transition projects we show how the biofuels controversy is linked to characteristics of globalised industrial agricultural systems the legitimacy problems of biofuels cannot be addressed by sustainability indicators or new technologies alone since they arise from the spatial ordering of biofuel production in the 1970 80s promoters of bioenergy anticipated current concerns about food security implications but envisioned bioenergy production to be territorially embedded at national or local scales where these issues would be managed where the territorial and scalar vision was breached it was to imagine poorer countries exporting higher value biofuel to the north rather than the raw material as in the controversial global biomass commodity chains of today however controversy now extends to the global impacts of national biofuel systems on food security and greenhouse gas emissions and to their local impacts becoming more widely known south south and north north trade conflicts are also emerging as are questions over biodegradable wastes and agricultural residues as global commodities as assumptions of a food versus fuel conflict have come to be challenged legitimacy questions over global agri business and trade are spotlighted even further in this context visions of biofuel development that address these broader issues might be promising these include large scale biomass for fuel models in europe that would transform global trade rules to allow small farmers in the global south to compete and small scale biofuel systems developed to address local energy needs in the south

emissions taxes and abatement regulation under uncertainty we consider environmental regulation in a context where firms invest in abatement technology under conditions of uncertainty about subsequent abatement cost but can subsequently adjust output in the light of true marginal abatement cost where an emissions tax is the only available instrument policy faces a trade off between the incentive to invest in abatement technology and efficiency in subsequent output decisions more efficient outcomes can be achieved by supplementing the emissions tax with direct regulation of abatement technology or by combining the tax with an abatement technology investment subsidy we compare the properties of these alternative instrument combinations

analyzing the functional dynamics of technological innovation systems a scheme of analysis various researchers and policy analysts have made empirical studies of innovation systems in order to understand their current structure and trace their dynamics however policy makers often experience difficulties in extracting practical guidelines from studies of this kind in this paper we operationalize our previous work on a functional approach to analyzing innovation system dynamics into a practical scheme of analysis for policy makers the scheme is based on previous literature and our own experience in developing and applying functional thinking it can be used by policy makers not only to identify the key policy issues but also to set policy goals

an econometric analysis of changes in the cost and production structure of the trucking industry 1953 1982 a cost function is estimated using a time series cross section database for the trucking industry covering the time period from 1953 through 1982 i e after the implementation of the motor carrier act of 1980 which essentially deregulated the industry two conclusions emerge first similarities between early periods of regulation and deregulation are greater than between early and late periods of regulation second a comparison of the regulated and deregulated cost functions indicates that the heaviest burden of regulation was borne by those firms which faced the highest costs copyright 1988 by mit press

the choice between emission taxes and output taxes under imperfect monitoring we consider a regulator s choice between environmentally motivated emissions taxes and output taxes we investigate how the optimal instrument depends on the monitoring cost function the firm s technology and on social preferences regarding output and environmental quality pure emissions taxes are usually not optimal with monitoring costs pure output taxes are optimal under sufficiently high monitoring costs sufficiently limited options for emission reduction by means other than output reduction and sufficiently high substitutability of the output finally conditions for the optimality of mixed taxes are given

effects of restraining steel exports from the republic of korea and other countries to the united states and the european economic community in this article a model is developed to evaluate the impact on an exporting country of a restraint imposed on its export by an importing economy in the context of a three region model of world trade in a single product the welfare changes in any of the three regions in the model and in the global economy can be evaluated the model is applied to the restraints imposed on steel exports from the republic of korea to the united states and the european economic community eec the united states and the eec are found to have incurred significant losses as a result of the restraints the largest part of these losses are quota rents transferred to korea and the rest of the world under reasonable parameter assumptions korea and the rest of the world obtain net gains from the quotas because the resource misallocation costs are smaller than the quota rents the model is modified to analyze a tariff barrier rather than a quantitative restraint it is found that an equivalent tariff on steel transforms korea and the rest of the world from net gainers to net losers as a result of a restraint

overcoming barriers to innovation and diffusion of cleaner technologies some features of a sustainable innovation policy regime despite a deepening understanding of systems and processes by which the innovation and diffusion of cleaner technologies occurs relatively little attention has been given to the development of policy processes that reflect this deeper understanding a set of guiding principles for improving sustainable innovation policy processes has been formulated and disseminated by the authors and colleagues in research drawing on theoretical and empirical analysis including a case study of low carbon energy innovation in the uk and interactions with policy makers and other stakeholders through a series of workshops this paper elaborates on two of the guiding principles 1 stimulating the development of a sustainable innovation policy regime bringing together innovation and environmental policy regimes 2 applying systems thinking engaging with the complexity and systemic interactions of innovation systems and policy making processes to promote a transition to sustainability

the price of negligence under differing liability rules although economics journals have been filled with theoretical articles about the effects of various negligence rules on allocative efficiency there have been no econometric studies on whether juries act according to the standards implied by the various liability rules if juries do not act accordingly then the actual allocative effects of a particular liability rule can vary greatly from the theoretical predictions because those who are subject to liability for example automobile drivers will face expected losses different from the theoretically determined ones in this paper i first develop hypotheses concerning the interrelationship of liability rules jury decision making and litigant behavior and then test these hypotheses using data from 582 civil cases involving rear end automobile accidents in california during 1974 76 in a sense jury trials are the ultimate arbiters in all personal injury cases while some trials involve only a judge and many cases are negotiated out of court both sides always have the option of going to ajury trial the expected behavior of juries therefore sets the boundaries within which negotiated settlements take place for example if the jury is expected to award the plaintiff 100 000 the plaintiff will not accept a negotiated settlement of 2 000 if juries tend to award more than judges do then plaintiffs will tend to opt for juries if juries tend to award less than

the bias due to omitting quality when estimating automobile demand the conclusions of policy oriented market studies often hinge upon the size of an estimated demand elasticity few of the researchers who have estimated such elasticities have utilized a variable designed to measure the subjective concept of quality if quality both significantly affects the demand for a heterogeneous good and is positively correlated with price omitting quality from a demand regression will lead to a downward bias in the estimated price elasticity using levinsohn s 1988 model of the automobile market as a framework this note shows that including quality variables can increase the model s estimated price elasticity by more than 80 percent copyright 1991 by mit press

behavior of the firm under regulatory constraint a recent article by akira takayama discusses an earlier paper by harvey averch and leland l johnson on fair rate of return regulation of public utilities although takayama p 255 agrees with averch and johnson s general conclusions that a firm will tend to increase its investment with the introduction of an active constraint on its rate of return he criticizes the a j argument as being confusing ambiguous and in error takayama then attempts a clarification and presents a new formulation which leads to the a j result quoted above this comment will discuss several of takayama s criticisms in addition to showing that the so called a j effect cannot be derived from the basic assumptions made by both averch and johnson and takayama 1 we will show that the very assumptions used to prove the a j effect by defining the region of x require an assumption that the a j effect exists in the first place

internationalization as a strategy to overcome industry barriers an assessment of the marine energy industry abstract research on conditions to develop new innovations within emerging renewable energy industries is often done with a national focus however recent research on international entrepreneurship has revealed that firms operate on international levels very early in their life time thus based on former research on international entrepreneurship and case examples we build the propositions that firms in the marine energy industry use internationalization as a strategy to overcome industry barriers our primary source of data is a unique dataset from a global survey of all the companies in the marine energy industry who are aiming to commercialize a wave or tidal energy device this paper is organized in two steps first we identified the most challenging industry barriers perceived by companies second we use these to form propositions which we assess through empirical data the two most challenging barriers perceived by the companies are need for capital and need for supportive political schemes our findings reveal that internationalization certainly is a common strategy to access capital and attractive support schemes in foreign countries the early internationalization has implications for researchers managers and policy makers

public education supply and student performance this paper develops a model of public exchange whereby voters and education policy makers exchange with one another within school districts because school district consolidation lowers alternatives to voters parents consolidation is hypothesized to raise public education spending because weakened intergovernmental competition allows policy makers to promote their own utility rather than that of constituents models of public education spending and academic performance are estimated over 1988 1990 while evidence indicates little support for the traditional treatment of the leviathan hypothesis that greater competition lowers public spending this paper argues that education spending by itself does not fully provide a valid test of the leviathan hypothesis since spending by itself does not necessarily indicate the quality of public education programmes empirical evidence indicates that greater numbers of schools and school districts promote higher student achievement as evidenced by higher math and v

globalisation of knowledge production and regional innovation policy supporting specialized hubs in the bangalore software industry abstract this paper is concerned with the changing role of regional innovation systems and regional policies in supporting the transition of indigenous firms in developing countries from competing on low costs towards becoming knowledge providers in global value chains special attention is paid to policies supporting the emergence and development of the regional innovation system in this transition process regional innovation systems in developing countries have very recently started to be conceptualised as specialized hubs in global innovation and production networks asheim b coenen l vang lauridsen j 2007 face to face buzz and knowledge bases socio spatial implications for learning innovation and innovation policy environment and planning c government and policy 25 5 655 670 chaminade c vang j 2006a innovation policy for small and medium size smes in asia an innovation systems perspective in yeung h ed handbook of research on asian business edward elgar cheltenham maggi c 2007 the salmon farming and processing cluster in southern chile in pietrobello c rabellotti r eds upgrading and governance in clusters and value chains in latin america harvard university press a specialized hub refers to a node in a global value chain that mainly undertakes one or a few of the activities required for the production and development of a given good or service or serves a particular segment of the global market in global value chains firms in developing countries have traditionally been responsible for the lowest added value activities however a few emerging regional innovation systems in developing countries are beginning to challenge this scenario by rapidly upgrading in the value chain there is however still only a poorly developed understanding of how the system of innovation emerges and evolves to support this transition process and what the role of regional innovation policy is in building the regional conditions that support indigenous small and medium size enterprises smes in this transition process this paper aims at reducing this omission by analyzing the co evolution of the strategies of indigenous smes and the regional innovation system of bangalore india

gatt safeguards and voluntary export restraints what are the interests of developing countries introduction trade in services and the multilateral trade negotiations agriculture in the uruguay round interests of developing countries gatt law agricultural trade and developing countries lessons from two case studies textiles and clothing in a new round of trade negotiations differential and more favorable treatment of developing countries and the international trading system balance of payments and related issues in the uruguay round of trade negotiations gatt safeguards and voluntary exports restraints what are the interests of developing countries international control of subsidies and countervailing duties export promoting subsidies countervailing threats and the general agreement on tariffs and trade

adverse selection and pigou taxes it id assumed that firms have different technologies and that an environment protection agency knows which technologies exist but not which is used by which firms neither the emissions of individual firms nor their total emissions are observable the output of each individual firm however can be monitored without cost based on this information tax schemes are constructed which induce firms to produce the socially efficient output quantities conditions about cost functions are derived which ensure the existence of tax schemes which yield first best solutions

a social capital paradox entrepreneurial dynamism in a small world clean technology cluster abstract clean tech entrepreneurs have struggled to gain investor confidence because of some particular characteristics and circumstances of the industry this research combines network and sustainable development literature in the clean tech context to support the logic of a new investment approach that may stimulate sustainable investing in clean tech theory is proposed to suggest that there may be an advantageous social capital paradox where strong ties in a cluster lead to dynamism rather than decay the clean tech industry provides a context where strong ties offer network stability in a small world cluster such that it is a value creating organizational form offering greater dynamism two related propositions are developed to support the social capital paradox they lead to a theoretical conclusion that long term integrated partner solutions where partners are also resource constrained lead to successful alliances supporting a dynamic cluster that will grow over time a practical conclusion is that investing in a connected cluster of firms might be less risky compared to investing in a new firm or even a portfolio of well diversified assets de risking clean production investments may be achievable through a small world network cluster backed security

environmental policy under imperfect information incentives and moral hazard abstract when net emissions of individual polluters cannot be efficiently monitored then emissions charges controls on emissions levels or subsidies for emissions reduction are not effective as environmental policy instruments this paper proposes instruments that can be applied in such limited information situations these instruments take the form of contracts between a pollution control agency and individual polluters the contracts include a combination of fines and subsidies that induces dischargers to follow optimal environmental policies in the absence of individual monitoring

behavior of the firm under regulatory constraint a recent article in this review by averch and johnson 3 on the fair rate of return regulation in public utilities industries or more generally regulated industries attracted the attention of many economists in essence averch johnson argues that the introduction of an active constraint of a fair rate of return type would induce the firm to invest more than the original profit maximizing value of capital and this would create an inefficient allocation of inputs in addition to frequent citations in verbal arguments it has invited some thieoretical extensions by economists such as wvestfield 8 and klevorick 5 all of the writers seem to accept the basic theoretical foundations set by averch and johnson for example klevorick 5 recently proposed that the fair rate of return should be inversely related to the size of the capital of a firm the intuitive basis for this is apparent for it in effect creates a penalty as the amount of capital used by the firm increases however it seems to me that averchjohnson s original arguments are sketchy and contain somewhat ambiguous logic at several important points although their conclusion for which they tried to find empirical support that a firm will tend to increase its investment with the introduction of an active constraint seems to be correct it does not follow from their arguments in particular there seems to be a serious error which arises from confusing movements along a curve and shifts of a curve in section ii we clarify those ambiguities and if necessary correct the mistakes in the third section of this paper we shall provide a new formulation of the problem we shall find that the new formulation will give the same answer as averchjohnson namely that a firm will tend to invest more with the iiltroductioin of an active constraint it should be noted however that while the conclusion happens to be the same this was not the necessity for we needed a completely new formulation to obtain the old conclusion

doha merchandise trade reform what is at stake for developing countries this paper provides new estimates of the global gains from multilateral trade reform and their distribution among developing countries in the presence of trade preferences particular attention is given to agriculture as farmers constitute the poorest households in developing countries but are the most assisted in rich countries the latest gtap database version 6 05 and the linkage model of the global economy are used to examine the impact first of current merchandise trade barriers and agricultural subsidies and then of possible reform outcomes from the wto s doha development agenda the results suggest moving to free global merchandise trade would boost real incomes in sub saharan africa proportionately more than in other developing countries or high income countries despite a terms of trade loss in parts of that region net farm incomes would rise substantially in that and other developing country regions thereby alleviating rural poverty a doha partial liberalization could move the world some way toward those desirable outcomes but more so the more developing countries themselves cut applied tariffs particularly on agricultural imports

environmental regulation a value theoretic and class based analysis following a value theoretic and class based approach it is argued in this paper that ecological problems are inseparably linked to the process of extracting surplus value in capitalism and owing to their adverse impacts instigate struggles over the appropriation of nature these struggles fought within and outside the state by competing agents shape environmental regulation in particular taxes permits command and control measures and subsidies affect prices profits and rents and have class and other social implications evidence of current environmental regulation shows that it takes places under the great influence of capitalist concerns

the critical role of informed political direction for advancing technology the case of swedish marine energy marine energy technologies can contribute to meeting sustainability challenges but they are still immature and dependent on public support this paper employs the technological innovation systems tis framework to analyze the development and diffusion of swedish marine energy up until 2014 while there were promising device developers relevant industrial capabilities and world class research the system suffered from weaknesses in several important innovation processes finally the analysis identifies the lack of informed political direction as a critical blocking factor and highlights its connection to domestic market potential

from lagging to leading technological innovation systems in emerging economies and the case of chinese wind power there is increasing attention for the contribution of emerging economies to global innovation including innovation of renewable energy technologies the technological innovation systems tis framework presents a list of system functions for the analysis of the development of a technology it has often been applied to renewable energy technologies but with a strong focus on advanced economies in this paper we elaborate on emerging economy innovation system formation structured according to tis functions rather than analysing development of the technology we analyse the development of the chinese tis vis a vis the global forefront key to this notion is that tis especially for clean tech are transnational phenomena lagging tis depend on the global tis whereas leading tis contribute to its formation it is concluded that china has reduced its dependence on foreign knowledge and investment but the outward contribution remains limited the main challenge to foreign market expansion lies in reforming the domestic tis to focus on turbine quality rather than cost reduction demonstration projects are needed especially for large capacity and offshore turbine models in order to build up operational history and get quality certification

environmental impairment liability as an instrument of environmental policy abstract this paper evaluates the role of liability that may arise in the context of an impairment of the environment environmental impairment liability or eil for short is analyzed as an instrument of environmental policy interrelationships between injurers victims the legal system insurers and the environment serve to show that eil may contribute to preserve the environment however peculiarities such as mass torts and uncertain behavior of courts serve to detract from the effectiveness of eil the question arises of whether these shortcomings are 1 mitigated or exacerbated by eil insurance the potential contribution of insurance to eil is found to be undermined by partial market failure which however can be alleviated by permitting the flotation of environmental risk warrants on capital markets

regulation and industrial organization this paper examines the effects on firm behavior and industry structure of industry wide price regulation by the state such regulation wherein regulators set prices with regard to an industry wide aggregate performance measure has been and still is widely used and is shown to induce inefficiencies in firm operation in general such regulation can result in setting prices high enough to maintain inefficient firms and it encourages to inefficient firm operation due to incentives to inflate costs and averch johnson effects

comparing the innovation effects of support schemes for renewable electricity technologies a function of innovation approach abstract the aim of this paper is to provide a comparative assessment of the innovation effects of instruments which support the diffusion of renewable electricity technologies with a functions oriented technological innovation system perspective the paper provides a link between two major streams of the literature the functions of innovation systems and the literature on renewable electricity support schemes we show that when a functional perspective is adopted feed in tariffs are likely to be superior to other policy instruments quotas with tradable green certificates and tendering although they still need to be complemented with other instruments most importantly direct r d support furthermore those innovation effects are affected by the specific design elements of the instruments chosen

a flexible assurance bonding system for improved environmental management abstract current methods of regulating activities that are known or suspected to be environmentally danaging are not working well they induce legal confrontation obfuscation and government intrusion into the inner workings of firms they tend to suppress technical and social innovation aimed at long term solutions they do not mesh well with the market signals that firms use to make decisions this paper discusses some of the underlying reasons for this problem and outlines a flexible environmental assurance bonding system designed to incorporate environmental criteria and uncertainty into the market system and to induce positive environmental technological innovation in addition to direct charges for known environmental damages an assurance bond equal to the current best estimate of the largest potential future environmental damages would be levied and kept in an interest bearing escrow account the bond plus a portion of the interest would be returned if and only if the firm could prove that the suspected damages had not occured or would not occur if damages did occur the bond would be used to rehabilitate or repair the environment and to compensate injured parties by requiring the users of environmental resources to post a bond adequate to cover potential future environmental damages with the possibility for refunds the burden of proof is shifted from the public to the resource user and a strong economic incentive is provided to research the true costs of environmentally innovative activities and to develop innovative cost effective pollution control technologies

redefining innovation eco innovation research and the contribution from ecological economics while innovation processes toward sustainable development eco innovations have received increasing attention during the past years theoretical and methodological approaches to analyze these processes are poorly developed against this background the term eco innovation is introduced in this paper addressing explicitly three kinds of changes towards sustainable development technological social and institutional innovation secondly the potential contribution of neoclassical and co evolutionary approaches from environmental and innovation economics to eco innovation research is discussed three peculiarities of eco innovation are identified the double externality problem the regulatory push pull effect and the increasing importance of social and institutional innovation while the first two are widely ignored in innovation economics the third is at the least not elaborated appropriately the consideration of these peculiarities may help to overcome market failure by establishing a specific eco innovation policy and to avoid a technology bias through a broader understanding of innovation finally perspectives for a specific contribution of ecological economics to eco innovation research are drawn it is argued that methodological pluralism as established in ecological economics would be very beneficial for eco innovation research a theoretical framework integrating elements from both neoclassical and evolutionary approaches should be pursued in order to consider the complexity of factors influencing innovation decisions as well as the specific role of regulatory instruments and the experience gathered in ecological economics integrating ecological social and economic aspects of sustainable development is highly useful for opening up innovation research to social and institutional changes 2000 elsevier science b v all rights reserved

the national system of innovation in historical perspective contrary to some recent work on so called globalisation this paper argues that national and regional systems of innovation remain an essential domain of economic analysis their importance derives from the networks of relationships which are necessary for any firm to innovate whilst external international connections are certainly of growing importance the influence of the national education system industrial relations technical and scientific institutions government policies cul tural traditions and many other national institutions is fundamental the historical examples of germany japan and the former ussr illustrate this point as well as the more recent contrast between east asian and latin american countries introduction the national system of friedrich list according to this author s recollections the first person to use the expression national system of innovation was bengt ake lundvall and he is also the editor of a highly original and thought provoking book 1992 on this subject however as he and his colleagues would be the first to agree and as lundvall himself points out the idea actually goes back at least to friedrich list s conception of the national system of political economy 1841 which might just as well have been called the national system of innovation the main concern of list was with the problem of germany overtaking england and for underdeveloped countries as germany then was in relation to england he advocated not only protection of infant industries but a broad range of policies designed to accelerate or to make possible industrialisation and economic growth most of these policies were concerned with learning about new technology and applying it the racialist and colonialist overtones of the book were in strong contrast to the inter nationalist cosmopolitan approach of the classical free trade economists and list s belief that holland and denmark should join the german bund and acquire german nationality because of their descent and whole character reads somewhat strangely in the european community of today nevertheless despite these unattractive features of his outlook he clearly anticipated many contemporary theories after reviewing the changing ideas of economists about development in the years since the second world war the world bank 1991 concludes that it is intangible investment in knowledge accumulation which is decisive rather than physical capital investment as was at one time believed pages 33 35 the report cites the new growth theory

pollution control with imperfectly observable emissions in this paper a model of environmental regulation with imperfect monitoring of emissions is presented the regulator can use linear output taxes and emission taxes to influence the pollution level of a risk averse firm in contrast to the perfect monitoring case a tax mix will usually be optimal the relative weight depends on the degree of risk aversion and monitoring imperfection and on technological factors

contributions of neoclassical economics to public utili iy analysis neoclassical economics the dominant economics paradigm has influenced and been influenced by developments in regulated industries we identify major theoretical and empirical accomplishments discuss the impactofthese accomplishmentsonpolicydevelopment andlist the channelsthrough which the impacts are madepossible we then discuss regulatorypolitics lack ofresearchperspective an overly narrow focus on economic efficiency and the academic profession as factors limiting the impact of neoclassical economics on public policy

technology transfer and spillovers does local participation with multinationals matter this paper examines the effects on technology transfer and spillovers deriving from ownership sharing of foreign multinational affiliates more specifically we try to answer two questions using unpublished indonesian micro data firstly do establishments with minority and majority ownership differ in terms of productivity levels secondly does the degree of spillover differ with the degree of ownership in the fdi our results show that foreign establishments have comparable high levels of labor productivity and that domestic establishments benefit from spillovers however the degree of foreign ownership does neither affect the level of labor productivity in foreign establishments nor the degree of spillovers

an ecological economic modelling procedure to design compensation payments for the efficient spatio temporal allocation of species protection measures abstract using an interdisciplinary approach we present an ecological economic modelling procedure to design compensation payments for species protection we develop our procedure on the example of white stork protection in a spatio temporally structured landscape generated by human land use the proposed procedure is able to solve complex allocation problems such as the spatio temporal allocation of a budget among more than two areas with spatially differing species specific cost and benefit functions of any shapes furthermore the procedure delivers the efficient compensation payments not only qualitatively but quantitatively and is hence relevant to the implementation of species protection policies

innovation system strengths and weaknesses in progressing sustainable technology the case of swedish biorefinery development based on the combination of economic challenges and uncertain policy conditions in the united states european union and elsewhere the development of advanced biorefineries has progressed slower than anticipated this has delayed the transition to a more sustainable and less carbon intensive economy in this article we adopt the technological innovation system tis approach to analyze advanced biorefinery development in sweden a front runner country in current development the analysis highlights a number of system strengths e g long term research funding significant research infrastructure strong actor networks that have contributed to developing the swedish tis but also important system weaknesses e g weak coordination among ministries lack of industrial absorptive capacity unclear roles inhibiting it the article highlights a combination of four policy measures that build on the system strengths to address the system weaknesses a the implementation of a deployment policy for creating domestic niche markets b improved policy timing and more structured coordination among different governmental agencies c the provision of stronger incentives for mature industries to invest in rd and d improved organization and financing of existing research infrastructure in addition to the empirical contribution the article contributes with novel insights into the tis framework by highlighting the dynamics between system strengths and weaknesses and suggests that system strengths should be better emphasized in future tis studies

carbon market risks and rewards firm perceptions of cdm investment decisions in brazil and india the carbon market experiences of brazil and india represent policy success stories under several criteria a careful evaluation however reveals challenges to market development that should be addressed in order to make the rollout of a post 2012 cdm more effective we conducted firm level interviews covering 82 cdm plants in the sugar and cement sectors in brazil and india focusing on how individual managers understood the potential benefits and risks of undertaking clean development mechanism cdm investments our results indicate that the cdm operates in a far more complex way in practice than that of simply adding a marginal increment to a project s internal rate of return our results indicate the following first although anticipated revenue played a central role in most managers decisions to pursue cdm investments there was no standard practice to account for financial benefits of cdm investments second some managers identified non financial reputational factors as their primary motivation for pursuing cdm projects and third under fluctuating regulatory regimes with real immediate costs and uncertain cdm revenue managers favored projects that often did not require carbon revenue to be viable the post 2012 cdm architecture can benefit from incorporating these insights and in particular reassess goals for strict additionality and mechanisms for achieving it

contracting for tacit knowledge the provision of technical services in technology licensing contracts abstract recent research on the economic payoff from new technology has emphasized the importance of tacit knowledge or know how this paper shows that arm s length contract can overcome the problems in contracting for know how by bundling complementary inputs with know how in a technology package and leveraging the superior enforceability of contracts over the latter in the empirical part of this paper the relationship between bundling and transfer of know how is analyzed using indian data the results imply that tied sales of inputs may increase the efficiency of contracts involving the transfer of know how a striking result in the context of the current north south debates on intellectual property rights is the packaging of patents with know how

controlling the monopolistic polluter nihilism or eclecticism abstract this paper is concerned with the consequences of pollution control when the polluter is a monopolist who can choose between abating pollution by reducing output and by adopting a less polluting technology it is suggested that the risk of welfare losses resulting from control policy is lower when technology is flexible than when it is rigid nevertheless some risk does remain so the paper concludes with a discussion of the possible use of selective control instruments to keep the risk to a minimum

international bioenergy trade a review of past developments in the liquid biofuel market policies aimed to promote biofuels locally had tremendous effects on global market developments across the past decade this article develops insights into the interaction of these policies and market forces via a comprehensive collection and analysis of international production and trade data it shows that world biofuel production and trade has grown exponentially from below 30 pj in 2000 to 572 pj in 2009 for biodiesel from 340 pj in 2000 to over 1540 pj in 2009 for fuel ethanol the eu has dominated world biodiesel whereas the us and brazil have led fuel ethanol production world net biofuel trade reached 120 130 pj in 2009 and was directed towards the most lucrative markets for biodiesel this has been the eu whose imports rose to 92 pj in 2008 and remained at 70 pj in 2009 regarding fuel ethanol both the us and the eu have been prime destinations for competitively priced exports the vast majority of which originated in brazil international biofuel trade is both supply and demand driven the demand side was shaped by support policies which generally increased the domestic market value of biofuels trade developed wherever these policies prices were not accompanied by respective measures it is found that import duties largely influenced trade volumes whereas trade routes were mainly driven by tariff preferences trade regimes appear to have been designed and adapted unilaterally along national interests causing market disruptions trade inefficiencies and disputes to avoid these it is important to explicitly consider international trade implications of national trade policies a prerequisite is to improve the understanding of the underlying complex and interwoven links within the market the current lack of adequate homogeneous international reporting of biofuel production and trade statistics could be bridged via internationally standardized custom clarifications trade factor interrelations also need to be investigated further

fostering a renewable energy technology industry an international comparison of wind industry policy support mechanisms this article examines the importance of national and sub national policies in supporting the development of successful global wind turbine manufacturing companies we explore the motivations behind establishing a local wind power industry and the paths that different countries have taken to develop indigenous large wind turbine manufacturing industries within their borders this is done through a cross country comparison of the policy support mechanisms that have been employed to directly and indirectly promote wind technology manufacturing in 12 countries we find that in many instances there is a clear relationship between a manufacturer s success in its home country market and its eventual success in the global wind power market whether new wind turbine manufacturing entrants are able to succeed will likely depend in part on the utilization of their turbines in their own domestic market which in turn will be influenced by the annual size and stability of that market consequently policies that support a sizable stable market for wind power in conjunction with policies that specifically provide incentives for wind power technology to be manufactured locally are most likely to result in the establishment of an internationally competitive wind industry

spatially uniform versus spatially heterogeneous compensation payments for biodiversity enhancing land use measures the importance of compensation payments for biodiversity enhancing land use measures has grown over the past decade particularly in connection with agri environmental policy given that both the costs and the benefits of biodiversity enhancing land use measures are subject to spatial variation the criterion of cost effectiveness calls for spatially heterogeneous compensation payments however when deciding whether to implement uniform or heterogeneous compensation payments the regulator has to compare the disadvantage of uniform payments in terms of cost effectiveness with the disadvantages of spatially heterogeneous payments to help resolve this issue this paper provides a simple ecological economic model that allows the reduced cost effectiveness associated with uniform payments for biodiversity enhancing land use measures to be assessed for different types of benefit and cost functions

regulating a monopolist with unknown costs we consider the problem of how to regulate a monopolistic firm whose costs are unknown to the regulator the regulator s objective is to maximize a linear social welfare function of the consumers surplus and the firm s profit in the optimal regulatory policy prices and subsidies are designed as functions of the firm s cost report so that expected social welfare is maximized subject to the constraints that the firm has nonnegative profit and has no incentive to misrepresent its costs we explicitly derive the optimal policy and analyze its properties in their classic papers dupuit 2 and hotelling 5 considered pricing policies for a bridge that had a fixed cost of construction and zero marginal cost they demonstrated that the pricing policy that maximizes consumer well being is to set price equal to marginal cost and to provide a subsidy to the supplier equal to the fixed cost so that a firm would be willing to provide the bridge this first best solution is based on a number of informational assumptions first the demand function is assumed to be known to both the regulator and to the firm while the assumption of complete information may be too strong the assumption that information about demand is as available to the regulator as it is to the firm does not seem unnatural a second informational assumption is that the regulator has complete information about the cost of the firm or at least has the same information about cost as does the firm this assumption is unlikely to be met in reality since the firm would be expected to have better information about costs than would the regulator as weitzman has stated an essential feature of the regulatory environment i am trying to describe is uncertainty about the exact specification of each firm s cost function in most cases even the managers and engineers most closely associated with production will be unable to precisely specify beforehand the cheapest way to generate various hypothetical output levels because they are yet removed from the production process the regulators are likely to be vaguer still about a firm s cost function 12 p 684 as this observation suggests it is natural to expect that a firm would have better information regarding its costs than would a regulator the purpose of this paper is to develop an optimal regulatory policy for the case in which the regulator does not know the costs of the firm one strategy that a regulator could use in the absence of full information about costs is to give the firm the title to the total social surplus and to delegate the pricing decision to the firm in pursuing its own interests which would then be to maximize the total social surplus the firm would adopt the same marginal cost pricing strategy that the regulator would have imposed if the regulator had

uniformity versus differentiation in regulating externalities abstract in the regulation of pollutant emissions a regulator may treat different sources with different costs and environmental damage as though they were the same for institutional informational or transaction cost reasons this may occur despite the efficiency gains from regulatory differentiation of sources this issue has been a source of much controversy in the environmental economics literature and is examined here from a theoretical perspective using a two pollutant economy emissions and net social benefits are compared for the case of efficient differentiated regulation and the case of uniform undifferentiated regulation of the aggregate of the two pollutants we show when aggregate emissions will be greater than equal to or less than efficient emissions and we derive conditions for each of these three possibilities further we show that when marginal costs and benefits become more steeply sloped the inefficiency associated with undifferentiated regulation increases