Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry

Philippe Aghion, Antoine Dechezleprêtre, David Hemous, Ralf Martin and John van Reenen

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Abstract: Can directed technical change be used to combat climate change? We construct new firm-level panel data on auto industry innovation distinguishing between "dirty" (internal combustion engine) and "clean" (e.g., electric, hybrid, and hydrogen) patents across 80 countries over several decades. We show that firms tend to innovate more in clean (and less in dirty) technologies when they face higher tax-inclusive fuel prices. Furthermore, there is path dependence in the type of innovation (clean/dirty) both from aggregate spillovers and from the firm's own innovation history. We simulate the increases in carbon taxes needed to allow clean technologies to overtake dirty technologies.

Keywords: Carbon; Taxes (search for similar items in EconPapers)
Date: 2016-01
New Economics Papers: this item is included in nep-eff, nep-ene, nep-env, nep-ino, nep-reg, nep-res, nep-sbm, nep-tid and nep-tre
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01496920
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Citations: View citations in EconPapers (345)

Published in Journal of Political Economy, 2016, 124 (1)

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Related works:
Journal Article: Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry (2016)
Working Paper: Carbon taxes, path dependency and directed technical change: evidence from the auto industry (2016)
Working Paper: Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry (2016)
Working Paper: Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry (2016)
Working Paper: Carbon Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry (2012)
Working Paper: Carbon Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry (2012)
Working Paper: Carbon Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry (2012)
Working Paper: Carbon taxes, path dependency and directed technical change: evidence from the auto industry (2012)
Working Paper: Carbon Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry (2012)
Working Paper: Carbon Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry (2012)
Working Paper: Carbon Taxes, Path Dependency and Directed Technical Change: Evidence from the Auto Industry (2012)
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