Technology innovations and experience curves for nitrogen oxides control technologies.

This paper reviews the regulatory history for nitrogen oxides (NOx) pollutant emissions from stationary sources, primarily in coal-fired power plants. Nitrogen dioxide (NO2) is one of the six criteria pollutants regulated by the 1970 Clean Air Act where National Ambient Air Quality Standards were established to protect public health and welfare. We use patent data to show that in the cases of Japan, Germany, and the United States, innovations in NOx control technologies did not occur until stringent government regulations were in place, thus "forcing" innovation. We also demonstrate that reductions in the capital and operation and maintenance (O&M) costs of new generations of high-efficiency NOx control technologies, selective catalytic reduction (SCR), are consistently associated with the increasing adoption of the control technology: the so-called learning-by-doing phenomena. The results show that as cumulative world coal-fired SCR capacity doubles, capital costs decline to approximately 86% and O&M costs to 58% of their original values. The observed changes in SCR technology reflect the impact of technological advance as well as other factors, such as market competition and economies of scale.

Effect of government actions on technological innovation for SO2 control.

The relationship between government actions and innovation in environmental control technology is important for the design of cost-effective policies to achieve environmental goals. This paper examines such relationships for the case of sulfur dioxide control technology for U.S. coal-fired power plants. The study employs several complementary research methods, including analyses of key government actions, technology patenting activity, technology performance and cost trends, knowledge transfer activities, and expert elicitations. Our results indicate that government regulation appears to be a greater stimulus to inventive activity than government-sponsored research support alone, and that the anticipation of regulation also spurs inventive activity. Regulatory stringency focuses this activity along particular technical pathways and is a key factor in creating markets for environmental technologies. We also find that with greater technology adoption, both new and existing systems experience notable efficiency improvements and capital cost reductions. The important role of government in fostering knowledge transfer via technical conferences and other measures is also seen as an important factor in promoting environmental technology innovation.