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Does foreign environmental policy influence domestic innovation? Evidence from the wind industry

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  • Antoine Dechezleprêtre
  • Matthieu Glachant

Abstract

This paper examines the relative influence of domestic and foreign renewable energy policies on innovation activity in wind power using patent data from OECD countries from 1994 to 2005. We distinguish between the impact of demand-pull policies (e.g., guaranteed tariffs, investment and production tax credits), as reflected by wind power capacities installed annually, and technology-push policies (government support to R&D). We show that inventors respond to both domestic and foreign new capacities by increasing their innovation effort. However, the effect on innovation of the marginal wind turbine installed at home is 28 times stronger than that of the foreign marginal wind turbine. Unlike demandpull policies, public R&D expenditures only affect domestic inventors. A simple calculation suggests that the marginal million dollars spent on R&D support generates 0.82 new inventions, whereas the same amount spent on the deployment of wind turbines induces, at best, 0.06 new inventions (0.03 locally and 0.03 abroad).

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Bibliographic Info

Paper provided by Grantham Research Institute on Climate Change and the Environment in its series Grantham Research Institute on Climate Change and the Environment Working Papers with number 44.

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Date of creation: Apr 2011
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Handle: RePEc:lsg:lsgwps:wp44

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  1. David Popp & Tamara Hafner & Nick Johnstone, 2007. "Policy vs. Consumer Pressure: Innovation and Diffusion of Alternative Bleaching Technologies in the Pulp Industry," NBER Working Papers 13439, National Bureau of Economic Research, Inc.
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  3. Matthieu Glachant & Antoine Dechezleprêtre & Ivan Hascic & Nick Johnstone & Yann Ménière, 2009. "Invention and Transfer of Climate Change Mitigation Technologies on a Global Scale: A Study Drawing on Patent Data," Working Papers 2009.82, Fondazione Eni Enrico Mattei.
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  7. Antoine Dechezleprêtre & Matthieu Glachant & Yann Ménière, 2009. "What drives the international transfer of climate change mitigation technologies? Empirical evidence from patent data," Grantham Research Institute on Climate Change and the Environment Working Papers 14, Grantham Research Institute on Climate Change and the Environment.
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Cited by:
  1. Peters, Michael & Schneider, Malte & Griesshaber, Tobias & Hoffmann, Volker H., 2012. "The impact of technology-push and demand-pull policies on technical change – Does the locus of policies matter?," Research Policy, Elsevier, vol. 41(8), pages 1296-1308.
  2. Antoine Dechezleprêtre & Richard Perkins & Eric Neumayer, 2012. "Regulatory Distance and the Transfer of New Environmentally Sound Technologies: Evidence from the Automobile Sector," Working Papers 2012.33, Fondazione Eni Enrico Mattei.
  3. Rob Aalbers & Victoria Shestalova & Viktoria Kocsis, 2012. "Innovation policy for directing technical change in the power sector," CPB Discussion Paper 223, CPB Netherlands Bureau for Economic Policy Analysis.
  4. Dutz, Mark A. & Sharma, Siddharth, 2012. "Green growth, technology and innovation," Policy Research Working Paper Series 5932, The World Bank.

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