Patent Protection and the Transition to Clean Technology

Maria Alsina-Pujols () and Isabel Hovdahl
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Maria Alsina-Pujols: Center of Economic Research, ETH Zurich, Zurichbergstrasse 18, 8092 Zurich, Switzerland

No 23/385, CER-ETH Economics working paper series from CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich

Abstract: We analyze the use of patent protection as a new policy to direct technical change to clean technology. Contrary to popular belief, it is dirty (and not clean) innovations that should be excluded from patent protection to reduce emissions. In the shortrun, removing patent protection on dirty technology increases emissions. However, the reduced markup on dirty technology can induce clean innovation, reducing emissions in the long-run. We use a general equilibrium model to show both analytically and numerically that removing patent protection on dirty technology can indeed promote the energy transition and reduce the cost of mitigating climate change.

Keywords: Patent protection; directed technical change; climate policy (search for similar items in EconPapers)
JEL-codes: H23 O33 O34 Q54 Q55 Q58 (search for similar items in EconPapers)
Pages: 68 pages
Date: 2023-08
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Persistent link: https://EconPapers.repec.org/RePEc:eth:wpswif:23-385

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