Screening Green Innovation through Carbon Pricing

Lassi Ahlvik and Inge van den Bijgaart

No 9931, CESifo Working Paper Series from CESifo

Abstract: Green innovation is essential for climate change mitigation, but not all innovative projects deliver equal social value. We consider innovator heterogeneity in a model where the policy maker cannot observe innovation quality and directly subsidize the socially most valuable green innovations. We find that carbon pricing works as an innovation screening device; this creates a premium on the optimal carbon price, raising it above the Pigouvian level. We identify conditions for perfect screening and generalize results to screening policies under alternative intellectual property regimes and complementary policies.

Keywords: carbon pricing; green innovation; optimal policy; R&D; screening (search for similar items in EconPapers)
JEL-codes: H23 O30 Q55 Q58 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-ene, nep-env, nep-ino and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Screening green innovation through carbon pricing (2024)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9931

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