A tale of two market failures: Technology and environmental policy

Market failures associated with environmental pollution interact with market failures associated with the innovation and diffusion of new technologies. These combined market failures provide a strong rationale for a portfolio of public policies that foster emissions reduction as well as the development and adoption of environmentally beneficial technology. Both theory and empirical evidence suggest that the rate and direction of technological advance is influenced by market and regulatory incentives, and can be cost-effectively harnessed through the use of economic-incentive based policy. In the presence of weak or nonexistent environmental policies, investments in the development and diffusion of new environmentally beneficial technologies are very likely to be less than would be socially desirable. Positive knowledge and adoption spillovers and information problems can further weaken innovation incentives. While environmental technology policy is fraught with difficulties, a long-term view suggests a strategy of experimenting with policy approaches and systematically evaluating their success. © 2005 Elsevier B.V. All rights reserved.

STAR 3 randomized controlled trial to compare sensor-augmented insulin pump therapy with multiple daily injections in the treatment of type 1 diabetes: research design, methods, and baseline characteristics of enrolled subjects.

BACKGROUND: Sensor-augmented pump therapy (SAPT) integrates real-time continuous glucose monitoring (RT-CGM) with continuous subcutaneous insulin infusion (CSII) and offers an alternative to multiple daily injections (MDI). Previous studies provide evidence that SAPT may improve clinical outcomes among people with type 1 diabetes. Sensor-Augmented Pump Therapy for A1c Reduction (STAR) 3 is a multicenter randomized controlled trial comparing the efficacy of SAPT to that of MDI in subjects with type 1 diabetes. METHODS: Subjects were randomized to either continue with MDI or transition to SAPT for 1 year. Subjects in the MDI cohort were allowed to transition to SAPT for 6 months after completion of the study. SAPT subjects who completed the study were also allowed to continue for 6 months. The primary end point was the difference between treatment groups in change in hemoglobin A1c (HbA1c) percentage from baseline to 1 year of treatment. Secondary end points included percentage of subjects with HbA1c < or =7% and without severe hypoglycemia, as well as area under the curve of time spent in normal glycemic ranges. Tertiary end points include percentage of subjects with HbA1c < or =7%, key safety end points, user satisfaction, and responses on standardized assessments. RESULTS: A total of 495 subjects were enrolled, and the baseline characteristics similar between the SAPT and MDI groups. Study completion is anticipated in June 2010. CONCLUSIONS: Results of this randomized controlled trial should help establish whether an integrated RT-CGM and CSII system benefits patients with type 1 diabetes more than MDI.

The induced innovation hypothesis and energy-saving technological change

We develop a methodology for testing Hicks's induced innovation hypothesis by estimating a product-characteristics model of energy-using consumer durables, augmenting the hypothesis to allow for the influence of government regulations. For the products we explored, the evidence suggests that (i) the rate of overall innovation was independent of energy prices and regulations; (ii) the direction of innovation was responsive to energy price changes for some products but not for others; (iii) energy price changes induced changes in the subset of technically feasible models that were offered for sale; (iv) this responsiveness increased substantially during the period after energy-efficiency product labeling was required; and (v) nonetheless, a sizable portion of efficiency improvements were autonomous.