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Do environmental policy and innovation improve carbon productivity? Evidence from the Korean Emission Trading Scheme

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  • Jung Youn Mo

Abstract

This study investigates the relationship among technology innovation, emission trading schemes, and carbon productivity based on data from firms participating in the Korean Emission Trading Scheme. First, the total factor carbon productivity based on stochastic frontier analysis is estimated by industry and it is confirmed that changes in carbon productivity vary by industry. Based on the estimated carbon productivity, panel data analysis is conducted to determine the effects of innovation and environmental policy on carbon productivity. The results show that R&D investment and environmental policy play an important role in promoting carbon productivity. In this study, the factors affecting carbon productivity are also analyzed by industry. Comparative analysis across industries confirms that factors affecting environmental performance vary by industry. Innovation does not significantly affect carbon productivity in assembling industries, but in the process industry, R&D investment plays an important role in increasing environmental performance.

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  • Jung Youn Mo, 2023. "Do environmental policy and innovation improve carbon productivity? Evidence from the Korean Emission Trading Scheme," Energy & Environment, , vol. 34(3), pages 445-462, May.
    • Handle: RePEc:sae:engenv:v:34:y:2023:i:3:p:445-462
    DOI: 10.1177/0958305X211064575
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    Cited by:

    1. Haider Mahmood & Maham Furqan & Najia Saqib & Anass Hamadelneel Adow & Muzaffar Abbas, 2023. "Innovations and the CO 2 Emissions Nexus in the MENA Region: A Spatial Analysis," Sustainability, MDPI, vol. 15(13), pages 1-20, July.

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