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Can CDM projects trigger host countries’ innovation in renewable energy? Evidence of firm-level dataset from China

Jingbo Cui (), Xi Liu, Yongping Sun and Haishan Yu

Energy Policy, 2020, vol. 139, issue C

Abstract: The goal of the Clean Development Mechanism (CDM) is both emission reduction and sustainable development, in this process, whether the host country's own technological innovation can be promoted should be an important part of the post assessment of CDM projects. This paper examines whether the CDM projects accumulated at the province level are positively correlated with Chinese firms’ innovation in technological fields associated with renewable energy and energy efficiency. We assemble a unique firm-level dataset with both firms’ patent innovation in renewable energy and CDM projects accounted for. We obtain some novel findings. CDM projects have contributed to the firm-level innovation in renewable energy and energy efficiency. The heterogeneity is detected. This positive enhancement effect is pronounced in invention patents, but is muted in utility patents. The induced innovation effect varies across industrial energy intensity. The more energy intensive the industry, the larger impacts the firms could absorb from the CDM projects. When inspecting CDM by specific energy type, the type-specific induced innovation effect is only documented for biofuel-related CDM projects, indicating that firm-level innovation in biofuels appears to benefit from the related CDM projects within the same province. Lastly, we do find some regional spillover effects in which the CDM projects accumulated at the province level have positive impacts on renewable energy innovation of the non-CDM firms.

Keywords: Clean development mechanism; Technology spillovers; Patent; Renewable energy (search for similar items in EconPapers)
JEL-codes: O3 Q42 Q55 (search for similar items in EconPapers)
Date: 2020
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DOI: 10.1016/j.enpol.2020.111349

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