Environmental policy and directed technological change: evidence from the European carbon market

Calel, Raphael and Dechezlepretre, Antoine (2016) Environmental policy and directed technological change: evidence from the European carbon market. Review of Economics and Statistics, 98 (1). pp. 173-191. ISSN 0034-6535

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Abstract

This paper investigates the impact of the European Union Emissions Trading System (EU ETS) on technological change, exploiting installations-level inclusion criteria to estimate the System's causal impact on firms' patenting. We find that the EU ETS has increased low-carbon innovation among regulated firms by as much as 10%, while not crowding out patenting for other technologies. We also find evidence that the EU ETS has not impacted patenting beyond the set of regulated companies. These results imply that the EU ETS accounts for nearly a 1% increase in European low-carbon patenting compared to a counterfactual scenario.

Item Type:	Article
Official URL:	http://www.mitpressjournals.org/
Additional Information:	© 2016 the President and Fellows of Harvard College and the Massachusetts Institute of Technology
Library of Congress subject classification:	J Political Science > JN Political institutions (Europe) T Technology > T Technology (General)
Journal of Economic Literature Classification System:	C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods: General > C14 - Semiparametric and Nonparametric Methods O - Economic Development, Technological Change, and Growth > O3 - Technological Change; Research and Development Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q55 - Technological Innovation Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy
Sets:	Research centres and groups > Grantham Research Institute on Climate Change and the Environment Research centres and groups > Centre for Economic Performance (CEP)
Project and Funder Information:	Project ID Funder Name Funder ID UNSPECIFIED Economic and Social Research Council http://dx.doi.org/10.13039/501100000269 UNSPECIFIED GranthamFoundation for the Protection of the Environment UNSPECIFIED
Projects:	PTA-026-27-2756
Funders:	Economic and Social Research Council, Jan Wallander and Tom Hedelius Foundation, Ciriacy-Wantrup Foundation, ADEME, Global Green Growth Institute, ESRC Postdoctoral Fellowship Scheme, Grantham Foundation for the Protection of the Environment
Date Deposited:	14 Jul 2015 13:59
URL:	http://eprints.lse.ac.uk/62723/

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