Environmental policy and directed technological change: evidence from the European carbon market

Raphael Calel and Antoine Dechezleprêtre

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: This paper investigates the impact of the European Union Emissions Trading System (EU ETS) on technological change, exploiting installations-level inclusion criteria to estimate the System's causal impact on firms' patenting. We find that the EU ETS has increased low-carbon innovation among regulated firms by as much as 10%, while not crowding out patenting for other technologies. We also find evidence that the EU ETS has not impacted patenting beyond the set of regulated companies. These results imply that the EU ETS accounts for nearly a 1% increase in European low-carbon patenting compared to a counterfactual scenario.

Keywords: directed technological change; EU emissions trading system; policy evaluation (search for similar items in EconPapers)
JEL-codes: C14 O3 Q55 Q58 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2016-03-01
New Economics Papers: this item is included in nep-eff, nep-ene, nep-env, nep-ino, nep-reg, nep-sbm and nep-tid
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Citations: View citations in EconPapers (307)

Published in Review of Economics and Statistics, 1, March, 2016, 98(1), pp. 173 - 191. ISSN: 0034-6535

Downloads: (external link)
http://eprints.lse.ac.uk/62723/ Open access version. (application/pdf)

Related works:
Journal Article: Environmental Policy and Directed Technological Change: Evidence from the European Carbon Market (2016)
Working Paper: Environmental policy and directed technological change: evidence from the European carbon market (2013)
Working Paper: Environmental Policy and Directed Technological Change: Evidence from the European carbon market (2012)
Working Paper: Environmental Policy and Directed Technological Change: Evidence from the European carbon market (2012)
Working Paper: Environmental Policy and Directed Technological Change: Evidence from the European Carbon Market (2012)
Working Paper: Environmental Policy and Directed Technological Change: Evidence from the European Carbon Market (2012)
Working Paper: Environmental policy and directed technological change: evidence from the European carbon maket (2012)
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