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Induced innovation in power generation technologies: Evidence from the Tokyo–Saitama Emissions Trading System

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  • Jia, Xiao
  • Takeuchi, Kenji

Abstract

Innovation in energy technology plays a critical role in the transition to net zero emissions. This study investigates the effect of a regional carbon cap-and-trade program on firms’ innovations in power generation technologies using renewable sources and fossil fuels. A difference-in-differences analysis based on matched firms from 2006 to 2016 indicates that the Tokyo–Saitama Emissions Trading System boosts innovations in renewable and fossil fuel technologies, with a greater impact on the latter. Furthermore, we find that firms innovating in both technology areas are more responsive than those only innovating in renewable technology and that a stricter regulatory scheme has a greater impact on technological innovation. These findings suggest the potential impact of a regional cap-and-trade program on green innovations.

Suggested Citation

  • Jia, Xiao & Takeuchi, Kenji, 2024. "Induced innovation in power generation technologies: Evidence from the Tokyo–Saitama Emissions Trading System," Energy Economics, Elsevier, vol. 129(C).
    • Handle: RePEc:eee:eneeco:v:129:y:2024:i:c:s0140988323007259
    DOI: 10.1016/j.eneco.2023.107227
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    Cited by:

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    2. Yang, Senmiao & Wang, Jianda & Dong, Kangyin & Dong, Xiucheng & Wang, Kun & Fu, Xiaowen, 2024. "Is artificial intelligence technology innovation a recipe for low-carbon energy transition? A global perspective," Energy, Elsevier, vol. 300(C).
    3. Li, Xueqin & Zheng, Zhuoji & Luo, Beier & Shi, Daqian & Han, Xianfeng, 2024. "The impact of electricity sales side reform on energy technology innovation: An analysis based on SCP paradigm," Energy Economics, Elsevier, vol. 136(C).
    4. Varoon Raksakulkarn & Wongkot Wongsapai & Sopit Daroon & Tassawan Jaitiang, 2025. "Designing a Sustainable Framework for Thailand’s Future Emissions Trading System," Sustainability, MDPI, vol. 17(19), pages 1-24, September.
    5. Ying Sun & Zhiqiang Ma & Fan Yang, 2025. "Revenue Distribution in Manufacturer–University Collaborative R&D for Industrial Generic Technologies," Sustainability, MDPI, vol. 17(20), pages 1-23, October.
    6. Zhao, Tianzhen & Ke, Haiqian & Zhang, Ning, 2025. "Comparing the innovation impacts on firms: Pilot vs. National Carbon Emission Trading Schemes in China," Applied Energy, Elsevier, vol. 377(PB).
    7. Zhang, Wei & Ke, Jinjun & Ding, Yougang & Chen, Sicen, 2024. "Greening through finance: Green finance policies and firms' green investment," Energy Economics, Elsevier, vol. 131(C).

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    Keywords

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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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