When the weak win: the role of investment in environmental lobbying (Q5953252)

The paper seeks to explore the reasons why environmentally damaging industries appear to be more successful at securing policy concessions and are often slow to embrace new technologies. An economy with two sectors: a competitive numeraire sector and a monopoly which produces a polluting good is considered. A novel explanation, which focuses upon the role of investment in technology as a credible commitment device is proposed. It is shown that the lobbying success of an industry depends critically upon its prior investment strategy. The analysis is based on a simple framework, which deals with the problem of pollution control. This paper extends the existing literature by exploring the impact of firm investment on environmental policy outcomes.