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Policy stringency under the European Union Emission trading system and its impact on technological change in the energy sector

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  • Bel, Germà
  • Joseph, Stephan

Abstract

In this study, we use patent count data for overall Climate Change Mitigation Technologies, and for those related to energy production and distribution to evaluate the relationship between the sizable oversupply of European Union emissions Allowances and a policy shift marked by the transition from Phase I to Phase II under the European Union Emission Trading System, on the one hand, and on “green” patenting, on the other. According to our results, the expected negative impact of this oversupply on technological change seems to be confirmed. Thus, stakeholders take the actual supply of certificates into account when determining their innovative activity. In the same vein, they do so with respect to policy changes related to greater stringency, which generated a sizeable increase in patenting activity when controlling for other economic factors. Our results suggest that a critical evaluation of emission caps and allowances distribution must be undertaken.

Suggested Citation

  • Bel, Germà & Joseph, Stephan, 2018. "Policy stringency under the European Union Emission trading system and its impact on technological change in the energy sector," Energy Policy, Elsevier, vol. 117(C), pages 434-444.
    • Handle: RePEc:eee:enepol:v:117:y:2018:i:c:p:434-444
    DOI: 10.1016/j.enpol.2018.03.041
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    More about this item

    Keywords

    Q55; Q58; O33; O38; Environmental policy; Emission trading system; Policy stringency; Technological change; Patent count data; Energy sector;
    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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