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Environmental policy and directed technological change: evidence from the European carbon maket

  • Rafael Calel
  • Antoine Dechezlepr�tre

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 ?nd 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 ?nd 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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Paper provided by Grantham Research Institute on Climate Change and the Environment in its series GRI Working Papers with number 75.

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Date of creation: Mar 2012
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Handle: RePEc:lsg:lsgwps:wp75
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