Green Technology and Patents in the Presence of Green Consumers

Corinne Langinier and Amrita Ray Chaudhuri

No 2018-15, Working Papers from University of Alberta, Department of Economics

Abstract: We develop a theoretical framework to investigate the impact of patent policies and emission taxes on green innovation that reduces the emission output ratio, and on the emission level. In the absence of green consumers, the introduction of patents results in a paradox whereby increasing emission tax beyond a certain threshold leads to a discrete increase in the emission level, which may be avoided by reducing the patenting cost. In the presence of green consumers, this paradox is restricted to an intermediate range of tax rates, and at sufficiently high tax rates, reducing the patenting cost may increase the emission level. Also, higher emission taxes increase green investment only if the fraction of green consumers is sufficiently small, and the magnitude of this effect decreases as this fraction increases. Moreover, a stricter patentability requirement is only effective at reducing emissions if the fraction of green consumers is sufficiently small.

Keywords: Patent; Clean Technologies; Environmentally Friendly Consumers; Rebound Effect (search for similar items in EconPapers)
JEL-codes: L13 O34 Q50 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2018-10-18
New Economics Papers: this item is included in nep-ene, nep-env, nep-ino, nep-ipr, nep-knm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:ris:albaec:2018_015

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