The Impact Of Federal Regulation Of Industrial Innovation

This book, originally published in 1995, examines the evolution of environmental policy in 6 OECD countries. Through numerous examples, it contrasts the widely-varying political and regulatory styles and their consequences for innovation. Two industry-specific case studies provide a transnational perspective on the co-evolution of technology and environmental policy. The book concludes that innovation can be successfully harnessed by setting credible, long-term environmental goals and ensuring that regulatory instruments are grounded in flexibility, dialogue and trust.

This historic book may have numerous typos and missing text. Purchasers can usually download a free scanned copy of the original book (without typos) from the publisher. Not indexed. Not illustrated. 1979-06 edition. Excerpt: ...also pointed out that the direct regulatory control procedures used by the EPA in water (and air) pollution do not provide strong positive incentives for firms to develop pollution-reducing technological advances. Rather, the current laws tend instead to channel the firm's efforts toward those approaches that have been sanctioned by regulatory authorities and that will avoid trouble in gaining their approval. Charles Schultze of the CEA has pointed out that laws that mandate regulatory authorities to impose the "best available technology" operate as a strong deterrent to experimentation with new techniques and technologies. He asks in this regard, "will firms in polluting industries sponsor research or undertake experimentation to develop a new means of reducing pollution still further if its very availability will generate new and more stringent regulations?" (Schultze, 1977, p. 53). The point, of course, is not that environmental legislation has not created a substantial demand for new pollution-control technologies. There is no question that this legislation has accelerated the development of numerous new technologies for pollution control. There are even instances in which innovation in pollution-control equipment has had positive spillover effects on firm efficiency and profitability as well as yielding broader social gains. But there is also ample evidence from which we conclude that the centralized mode of direct regulatory controls used in this country is not the best approach for encouraging such pollution-reducing technologies. The experiences in regulating air pollution from auto emissions (discussed below) provides a particularly good case illustration of this point. In place of the present centralized bureaucratic system...

This book contends that various forms of regulation have costs as well as benefits and it examines the impact of government regulation on the innovativeness of ’monopolies’ - in this book meaning firms with the power to affect market price. The government regulation analyzed in this case is limited to rate-of-return regulation. Using theoretical models such as the Averch-Johnson model and a two-stage Nash equilibrium model, this volume examines whether regulated monopolies engage in more or less technological innovation than unregulated monopolies. Furthermore, if the unregulated (or less regulated) monopolies do engage in more research and development than regulated ones, it questions whether social welfare would be greater with the former. Using a case study of ten privately-owned electric utilities in the State of Texas, USA, it then tests out the general propositions brought forward by the theoretical modelling and finally makes its conclusions taking into consideration both theoretical and empirical findings.