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Environmental Policies and Innovation in Renewable Energy

Author

Listed:
  • Luca Bettarelli
  • Davide Furceri
  • Pietro Pizzuto
  • Nadia Shakoor

Abstract

This paper investigates the effect of Climate Change Policies (CCPs) on green innovation, for a sample of 40 advanced and emerging market economies and 5 economic sectors, during the period 2000-2021. Our results suggest that CCPs increase green patents, with the effect increasing gradually over time. The effect is larger for non-market-based policies—such as R&D subsidies—and technology-support instruments, in countries with greater competitiveness and during periods of stronger economic activity—that is, higher GDP growth, lower uncertainty and financial stress. The results based on a difference-in-differences approach suggest that the positive effect of stricter CCPs on green innovation is stronger in sectors with limited financial constraints.

Suggested Citation

  • Luca Bettarelli & Davide Furceri & Pietro Pizzuto & Nadia Shakoor, 2023. "Environmental Policies and Innovation in Renewable Energy," IMF Working Papers 2023/180, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2023/180
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    Citations

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    Cited by:

    1. Francesco S. Bellelli & Ankai Xu, 2024. "The Impact of Environmental Measures on Trade and Innovation: Evidence from the WTO Environmental Database (EDB)," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(10), pages 2629-2682, October.
    2. Bettarelli, Luca & Furceri, Davide & Pizzuto, Pietro & Shakoor, Nadia, 2024. "Climate change policies and income inequality," Energy Policy, Elsevier, vol. 191(C).
    3. Benatti, Nicola & Groiss, Martin & Kelly, Petra & Lopez-Garcia, Paloma, 2024. "The impact of environmental regulation on clean innovation: are there crowding out effects?," Working Paper Series 2946, European Central Bank.
    4. Benatti, Nicola & Groiss, Martin & Kelly, Petra & Lopez-Garcia, Paloma, 2024. "Environmental regulation and productivity growth in the euro area: Testing the porter hypothesis," Journal of Environmental Economics and Management, Elsevier, vol. 126(C).

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