The Drivers and Macroeconomic Impacts of Low-Carbon Innovation: A Cross-Country Exploration

Zeina Hasna, Henry Hatton, Florence Jaumotte, Jaden Kim, Kamiar Mohaddes and Samuel Pienknagura

No 2025/130, IMF Working Papers from International Monetary Fund

Abstract: This paper investigates how climate policies affect low-carbon innovation (as measured by patents) and assesses the link between such innovation and economic activity. Climate policies, including international cooperation, spur both specific and overall innovation, with regulations, emissions-trading systems, and expenditure measures such as R&D subsidies and feed-in tariffs being particularly impactful. In turn, low-carbon innovation raises economic activity as much as other types of innovation and past technological revolutions. However, the mechanisms are different: low-carbon innovation increases capital accumulation, while other types of innovation increase total factor productivity (TFP).

Keywords: Low-Carbon Innovation; Growth; Climate policies; Climate change; Porter Hypothesis (search for similar items in EconPapers)
Pages: 68
Date: 2025-06-27
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Related works:
Working Paper: The Drivers and Macroeconomic Impacts of Low-Carbon Innovation: A Cross-Country Exploration (2025)
Working Paper: The Drivers and Macroeconomic Impacts of Low-Carbon Innovation: A Cross-Country Exploration (2025)
Working Paper: The Drivers and Macroeconomic Impacts of Low-Carbon Innovation: A Cross-Country Exploration (2025)
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