Environmental policy and directed technological change: evidence from the European carbon market
Raphael Calel and Antoine Dechezlepretre
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 affected 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. ? 2016 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.
1 March 2016
The Review of Economics and Statistics 98(1) , pp.173-191, 2016
http://hdl.handle.net/10419/59723
This Journal article is published under the centre's Growth programme.