Environmental Policies and Innovation in Renewable Energy

Luca Bettarelli, Davide Furceri, Pietro Pizzuto and Nadia Shakoor

No 2023/180, IMF Working Papers from International Monetary Fund

Abstract: This paper investigates the effect of Climate Change Policies (CCPs) on green innovation, for a sample of 40 advanced and emerging market economies and 5 economic sectors, during the period 2000-2021. Our results suggest that CCPs increase green patents, with the effect increasing gradually over time. The effect is larger for non-market-based policies—such as R&D subsidies—and technology-support instruments, in countries with greater competitiveness and during periods of stronger economic activity—that is, higher GDP growth, lower uncertainty and financial stress. The results based on a difference-in-differences approach suggest that the positive effect of stricter CCPs on green innovation is stronger in sectors with limited financial constraints.

Keywords: green patents; climate change policy; diff-in-diff approach; innovation; effect of Climate Change Policies; CCPS increase; innovation in renewable energy; technology-support instrument; technology-support policy; Environmental policy; Renewable energy; Climate policy; Competition; Climate change; Global (search for similar items in EconPapers)
Pages: 55
Date: 2023-09-01
New Economics Papers: this item is included in nep-ene, nep-env, nep-ino and nep-tid
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Citations: View citations in EconPapers (6)

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