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Patent Protection and the Transition to Clean Technology

Author

Listed:
  • Maria Alsina-Pujols

    (Center of Economic Research, ETH Zurich, Zurichbergstrasse 18, 8092 Zurich, Switzerland)

  • Isabel Hovdahl

    (Center of Economic Research, ETH Zurich, Zurichbergstrasse 18, 8092 Zurich, Switzerland)

Abstract

We analyze the use of patent protection as a new policy to direct technical change to clean technology. Contrary to popular belief, it is dirty (and not clean) innovations that should be excluded from patent protection to reduce emissions. In the shortrun, removing patent protection on dirty technology increases emissions. However, the reduced markup on dirty technology can induce clean innovation, reducing emissions in the long-run. We use a general equilibrium model to show both analytically and numerically that removing patent protection on dirty technology can indeed promote the energy transition and reduce the cost of mitigating climate change.

Suggested Citation

  • Maria Alsina-Pujols & Isabel Hovdahl, 2023. "Patent Protection and the Transition to Clean Technology," CER-ETH Economics working paper series 23/385, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    • Handle: RePEc:eth:wpswif:23-385
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    More about this item

    Keywords

    Patent protection; directed technical change; climate policy;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • 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

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