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Green Technology and Patents in the Presence of Green Consumers

Author

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  • Corinne Langinier
  • Amrita Ray Chaudhuri

Abstract

We develop a theoretical framework to investigate the impact of patent policies and emission taxes on green innovation that reduces the emission-output ratio, and on the emission level. In the absence of green consumers, the introduction of patents results in a paradox whereby increasing emission tax beyond a certain threshold leads to a discrete increase in the emission level, which may be avoided by reducing the patenting cost. In the presence of green consumers, this paradox is restricted to an intermediate range of tax rates, and at sufficiently high tax rates, reducing the patenting cost may increase the emission level. Also, higher emission taxes increase green investment only if the fraction of green consumers is sufficiently small, and the magnitude of this effect decreases as this fraction increases. Moreover, a stricter patentability requirement is only effective at reducing emissions if the fraction of green consumers is sufficiently small.

Suggested Citation

  • Corinne Langinier & Amrita Ray Chaudhuri, 2020. "Green Technology and Patents in the Presence of Green Consumers," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(1), pages 73-101.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/705565
    DOI: 10.1086/705565
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    Cited by:

    1. Corinne Langinier & Amrita Ray Chaudhuri, 2024. "Green Patents in an Oligopolistic Market with Green Consumers," Working Papers 2024-07, University of Alberta, Department of Economics.
    2. Marc St‐Pierre & Aaron A. Elrod, 2022. "The perverse effect of environmental regulation on emissions: The role of product‐mix changes," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(1), pages 197-235, February.
    3. Maria Urbaniec & Justyna Tomala & Sergio Martinez, 2021. "Measurements and Trends in Technological Eco-Innovation: Evidence from Environment-Related Patents," Resources, MDPI, vol. 10(7), pages 1-17, June.
    4. Langinier, Corinne & Martínez-Zarzoso, Inmaculada & RayChaudhuri, Amrita, 2025. "Environmental regulations and green innovation: The role of trade and technology transfer," Energy Economics, Elsevier, vol. 150(C).
    5. Guiomar Martín-Herrán & Santiago J. Rubio, 2024. "Efficiency-Inducing Policy for Polluting Oligopolists," Dynamic Games and Applications, Springer, vol. 14(1), pages 195-222, March.
    6. Grunevald, Isabel & Kipper, Liane Mahlmann & Ribas Moraes, Jorge Andre & Haupt, Leandro, 2023. "Scientific contributions on cleaner production through the use of patent information: A bibliometric analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 188(C).
    7. Dongdong Li, 2022. "Dynamic optimal control of firms' green innovation investment and pricing strategies with environmental awareness and emission tax," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 43(4), pages 920-932, June.
    8. Abdulla, Eman & Lim, King Yoong & Morris, Diego & Saliba, Faten, 2022. "Climate Change, Gender Equality, and Firm-Level Innovation : Cross-Country Evidence," The Warwick Economics Research Paper Series (TWERPS) 1429, University of Warwick, Department of Economics.
    9. Lim, King Yoong, 2024. "Heterogeneous environmental consciousness, carbon permit adoption, and endogenous growth: A case of China," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 734-751.

    More about this item

    JEL classification:

    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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