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Cited by 1,147Climate Change Policy and EconomicsEnvironmental Sustainability in BusinessIntellectual Property and Patents

Environmental Policy and Directed Technological Change: Evidence from the European Carbon Market

Open access
Calel, Raphael, Dechezleprêtre, Antoine·2016·Review of Economics and Statistics
DOI 10.1162/rest_a_00470
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Abstract

This paper investigates the impact of the European Union Emissions Trading System (EU ETS) on technological change, exploiting installations level inclusion criteria to estimate the System’s causal impact on firms’ patenting. We find 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 find evidence that the EU ETS has not affected patenting beyond the set of regulated companies. These results imply that the EU ETS accounts for nearly a 1% increase in European low-carbon patenting compared to a counterfactual scenario.

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Crossref · 10.1162/rest_a_00470

Cites

84 of 84 references verified0 citation errors · 0 not checkable

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  • The EU ETS accounts for only 1% of the surge in low-carbon patenting.

    “In all, the EU ETS accounts for only 1% of the surge in low-carbon patenting, depicted in .”

    From Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms' competitiveness? Empirical findings from the literature (2019) · cites this paper as Calel & Dechezleprêtre, 2016

    The Introduction, Results, and Discussion all estimate that the EU ETS accounts for roughly 2% of the post-2005 surge in low-carbon patenting, not 1%. The paper’s separate estimate of less than a 1% increase in low-carbon patenting at the EPO uses a different denominator. (LLM, conf=0.93)

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  • It has been demonstrated elsewhere that EU ETS-regulated firms reacted to the introduction of the policy by filing 30% more patents in low-carbon technologies compared to a counterfactual scenario.

    “In fact, it has been demonstrated elsewhere that EU ETS-regulated firms reacted to the introduction of the policy by filing 30% more patents in lowcarbon technologies compared to a counterfactual scenario (Calel and Dechezlepr ˆ etre, 2016).”

    From The joint impact of the European Union emissions trading system on carbon emissions and economic performance (2023) · cites this paper as Calel and Dechezlepr ˆ etre, 2016

    The Results report that EU ETS regulation increased low-carbon patenting relative to a counterfactual, but the estimate is 36.2% for the matched sample, not 30%. The paper estimates 9.1% when extrapolating to all EU ETS firms, a distinction the citing sentence does not make. (LLM, conf=0.84)

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  • This percentage drops to 8.1% when extrapolating results to the whole non-matched sample of EU ETS firms, covering 80% of regulated emissions.

    “This percentage drops to 8.1% when extrapolating results to the whole non-matched sample of EU ETS firms, covering 80% of regulated emissions.”

    From Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms' competitiveness? Empirical findings from the literature (2019) · cites this paper as Calel & Dechezleprêtre, 2016

    The Results section reports a 9.1% increase in low-carbon patenting when extrapolating to all 5,568 EU ETS firms, not 8.1%. The data-coverage discussion says those firms account for roughly 80% of EU ETS-wide regulated emissions. The extrapolation is to all identified EU ETS firms, including those in the matched sample, rather than to a wholly non-matched sample. (LLM, conf=0.88)

    Experimental — accuracy not yet measured

  • The overall contribution of China's pilot ETS to regional low-carbon innovation was similar to that of the EU ETS.

    “The overall contribution of China’s pilot ETS to regional low-carbon innovation was similar to that of the EU ETS22.”

    From Low-carbon innovation induced by emissions trading in China (2019) · cites this paper as [22]

    The Introduction (page not provided) estimates that the EU ETS accounted for less than a 1% increase in low-carbon patenting at the EPO. The paper does not assess China’s pilot ETS or compare its contribution with the EU ETS, so the claimed similarity is unsupported. (LLM, conf=0.85)

    Experimental — accuracy not yet measured

  • Patent filing, rather than patent granted, was used as the innovation measure because filing measures firms' innovative efforts and granted patents are unavailable for recent years.

    “Data about patent filing, instead of patent granted, have been used in the analysis, following the previous innovation research in Europe and China22,39,41,43.”

    From Low-carbon innovation induced by emissions trading in China (2019) · cites this paper as [22]

    Section III (page unavailable) says the study uses patents filed with the European Patent Office as its main innovation measure and treats patent counts as a proxy for the output of innovative activity. It does not say that granted patents were unavailable for recent years or give that as its reason for using filings; its discussion of recent-patent timing concerns citation data instead. (LLM, conf=0.86)

    Experimental — accuracy not yet measured

Self-check

Percentages, sums and reported differences re-computed from the paper’s own numbers.

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Cites

Flagged first, then by citations

2 of the 86 references couldn’t be matched to a known paper.

Research works printed but not linked: 4

  1. [19]19. Dernis, H., D. Guellec, and B. V. Pottelsberghe, "Using Patent Counts for Cross-Country Comparisons of Technology Output," STI Review 27 (2001).
  2. [24]24. ---"Emissions Trading: Annual Compliance Round-Up Shows Declin- ing Emissions in 2011," press release IP/12/477 (2012).
  3. [42]42. Jaffe, A. B., R. G. Newell, and R. N. Stavins, "Technological Change and the Environment" (pp. 461-516), in Karl-Göran Mäler and Jeffrey R. Vincent, eds., Handbook of Environmental Economics (New York: Elsevier, 2003).
  4. [73]73. Schleich, J., and R. Betz, "Incentives for Energy Efficiency and Innova- tion in the European Emission Trading System" (pp. 1495-1506), in Proceedings of the 2005 ECEEE Summer Study: What Works and Who Delivers? (2005).

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Authors
Calel, R., & Dechezleprêtre, A.
Affiliations
  • Georgetown University (US)
  • London School of Economics and Political Science (GB)
ORCID
Venue
Review of Economics and Statistics
Publisher
MIT Press
Published
2016-03
Volume
98
Issue
1
Pages
173-191
ISSN
  • 0034-6535 (ISSN-L)
  • 1530-9142
DOI
10.1162/rest_a_00470
OpenAlex
W3122318714
Cited by
1,147
References
86
Citations by year
2026: 227 · 2025: 151 · 2024: 161 · 2023: 134 · 2022: 139 · 2021: 80 · 2020: 74 · 2019: 39 · 2018: 69 · 2017: 25 · 2016: 20 · 2015: 11 · 2014: 8 · 2013: 5 · 2012: 2
FWCI
52.77
Type
journal article
Language
en
Open access
Locations
  • The Review of Economics and Statistics (publishedVersion)
  • RePEc: Research Papers in Economics (submittedVersion)
  • London School of Economics and Political Science Research Online (London School of Economics and Political Science) (submittedVersion)
Funders
  • Grantham Foundation for the Protection of the Environment
  • Economic and Social Research Council (ES/K006576/1, ES/I015760/1, PTA-026-27-2756, ES/M010341/1)
Topics
  • Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
  • Social Sciences › Business, Management and Accounting › Marketing › Environmental Sustainability in Business
  • Social Sciences › Business, Management and Accounting › Management of Technology and Innovation › Intellectual Property and Patents
Keywords
EU Emissions Trading System, carbon pricing, environmental policy, directed technological change, low-carbon innovation, patenting, crowding out, emissions regulation, European Union

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