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“Certificate Oversupply in the European Union Emission Trading System and its Impact on Technological Change”

Author

Listed:
  • Germà Bel

    (Faculty of Economics, University of Barcelona)

  • Stephan Joseph

    (Faculty of Economics, University of Barcelona)

Abstract

We examine the number of patent applications for climate change mitigation technologies (CCMT) filed at the European Patent Office and seek to relate it to the oversupply of emission allowances under the European Union Emission Trading System (EU ETS). We use a panel count data approach to show that firms covered by the policy take the oversupply into account when determining their level of innovative activity. We also indirectly demonstrate that the “weak” version of the Porter hypothesis holds for the EU ETS, given the sizable oversupply of allowances in the market. Our results suggest that in order to set the European economy firmly on the low-carbon technology pathway, and to ensure that the ambitious EU climate targets are met, serious policy changes must be undertaken.

Suggested Citation

  • Germà Bel & Stephan Joseph, 2015. "“Certificate Oversupply in the European Union Emission Trading System and its Impact on Technological Change”," IREA Working Papers 201520, University of Barcelona, Research Institute of Applied Economics, revised Sep 2015.
    • Handle: RePEc:ira:wpaper:201520
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    File URL: http://www.ub.edu/irea/working_papers/2015/201520.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Environmental Policy; Emission Trading System; Certificate Oversupply; Technological Change; Patent Count Data JEL classification: Q55; Q58; O33; O38;
    All these keywords.

    JEL classification:

    • 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
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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