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Environmental Policy and Directed Technological Change: Evidence from the European Carbon Market

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  • Raphael Calel
  • Antoine Dechezleprêtre

Abstract

This paper investigates the impact of the EU Emissions Trading Scheme (EU ETS) on technological change. We exploit installations-level inclusion criteria to estimate the impact of the EU ETS 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 lowcarbon patenting compared to a counterfactual scenario.

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Bibliographic Info

Paper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1141.

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Date of creation: Apr 2012
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Handle: RePEc:cep:cepdps:dp1141

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Web page: http://cep.lse.ac.uk/_new/publications/series.asp?prog=CEP

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Keywords: Directed technological change; EU Emissions Trading Scheme; policy evaluation;

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Citations

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Cited by:
  1. Angelo Antoci & Simone Borghesi & Mauro Sodini, 2012. "ETS and Technological Innovation: A Random Matching Model," Working Papers 2012.79, Fondazione Eni Enrico Mattei.
  2. Sebastian Petrick & Ulrich J. Wagner, 2014. "The Impact of Carbon Trading on Industry: Evidence from German Manufacturing Firms," Kiel Working Papers 1912, Kiel Institute for the World Economy.
  3. repec:hal:ciredw:hal-00866408 is not listed on IDEAS
  4. repec:hal:wpaper:hal-00866408 is not listed on IDEAS
  5. Heindl, Peter & Lutz, Benjamin, 2012. "Carbon management: Evidence from case studies of German firms under the EU ETS," ZEW Discussion Papers 12-079, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. Tilmann Rave, 2013. "Politikkoordination bei der Energiewende – dargestellt am Beispiel des Emissionshandelssystems und der Förderung erneuerbarer Energien," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 66(12), pages 23-36, 06.

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