Our Common Future Under Climate Change

International Scientific Conference 7-10 JULY 2015 Paris, France

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Thursday 9 July - 14:30-16:00 UNESCO Miollis - ROOM XVI

4413 (b) - Environmental policies to enable innovation and transformation

Parallel Session

Lead Convener(s): H. De Coninck (Radboud University, Nijmegen, Netherlands)

Convener(s): A. Ely (STEPS Centre, Sussex, United Kingdom), E. Verdolini (FEEM and CMCC, Milan, Italy)

14:30

Environmental policy, multinational firms and green innovation

J. Noailly (The Graduate Institute Geneva, Geneva, Switzerland), R. Smeets, (Rutgers Business School, Newark, United States of America)

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Environmental policy, multinational firms and green innovation

J. Noailly (1) ; R. Smeets, (2)
(1) The Graduate Institute Geneva, Program "innovation, sustainable growth and technological change", Geneva, Switzerland; (2) Rutgers Business School, Newark, United States of America

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This paper investigates the impact of environmental regulation on green innovation in a globalized world, where multinational firms locate production and R&D laboratories across several countries. Using firm-level data on multinational firms conducting green R&D both in developed and developing countries, we find that environmental regulation has a positive impact on clean innovation - in particular in countries where multinational firms face a pollution-haven motive, which is where firms locate their most dirty production processes. In other countries, other factors such as the wages of R&D workers and the country's absorptive capacity in green technologies seem to be more important triggers of clean innovation. Since multinational firms are a major channel for transfering technologies to developing countries, our results have implications for the design of policies aiming to promote the global diffusion of clean technologies.

14:50

Contextual Factors and Wind Energy Innovation Development ---- Comparing Germany, Denmark, China and India

D. Yixin (Tsinghua University, Beijing, China), J. Nordensvard (University of Southampton, Southampton , United Kingdom), A. Narain (University of Maryland, Maryland, United States of America)

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Contextual Factors and Wind Energy Innovation Development ---- Comparing Germany, Denmark, China and India

D. Yixin (1) ; J. Nordensvard (2) ; A. Narain (3)
(1) Tsinghua University, School of Public Policy and Management, Beijing, China; (2) University of Southampton, Southampton , United Kingdom; (3) University of Maryland, Maryland, United States of America

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Wind energy technology played significant role in response to climate change. Increasing academic studies tried to find the relationship between government support and the technology innovation development path. This research filled the literature gap by decomposing national contextual factors with endogenous wind policy design and implementation elements in the theoretical framework. Checking wind energy development in Denmark, Germany, China and India in the past 30 years, this research found influences coming from political context (i.e. governance structure change, governmental policy making capacity), economic context (i.e. national economic development paradigm), and social context (i.e. social legitimacy) that significantly shaped the national wind innovation path. The paper concluded that accessing wind energy policy required a through study of local context factors. One of the policy implications pointed out that policy and technology dissemination did not necessarily lead to similar innovation path. The paper also called for stable long-term support to wind sector development.

15:00

Trade flows and knowledge flows: the case of renewable energy generation

V. Bosetti (Fondazione Eni Enrico Mattei, Milano, Italy), E. Verdolini (FEEM Fondazione Eni Enrico Mattei, Milano, Italy)

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Trade flows and knowledge flows: the case of renewable energy generation

V. Bosetti (1) ; E. Verdolini (2)
(1) Fondazione Eni Enrico Mattei, Milano, Italy; (2) FEEM Fondazione Eni Enrico Mattei, CCSD, Milano, Italy

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Fostering sustainable growth while addressing climate change concerns entails that energy efficient and carbon free technologies be available and diffuse widely. However, innovation and the ownership of technologies are still concentrated in developed "frontier" countries. Key issues that confront researchers and policy makers alike in both developed and developing countries are (1) understanding the dynamics of knowledge and diffusion in this sector and (2) identify the key policy levers to promote to development and green growth. This will provide insight s on the ability of technologic al progress and technology diffusion to lower the costs associated with climate mitigation while fostering sustainable energy for all. Researchers focusing on the study of diffusion and transfer of energy and climate change related technologies have increasingly resorted to patent data as a proxy of interest. This is due to the wealth of information patents include, the wide coverage in terms of countries and the possibility to classify patent s by technology through the IPC classification. Two are the core assumptions made when using patent data to this end. First, patent citations or cross country patenting informs on the flow of intangible knowledge. Second, a patent application testifies the willingness to protect an idea in a given market and exploit a temporary monopoly of power. Hence, cross country patenting is correlated to some extent with technology production, marketing or licensing. Due to the lack of technical detail in other commonly used proxies such as trade data or R&D investment statistics, patent s have represented so far the best source of information in this respect and have thus been used to study knowledge format ion(Popp 2002 and Verdolini and Galeotti 2011 among others), the role of international and inter-sectoral spillovers (see for example Mariani 2008), the diffusion of cleaner technologies across countries (Hall and Helmers 2013, Bosetti and Verdolini 2013, Dechezlepretre et al. 2011), and issues related to directed technical change from dirty to clean innovation (Aghion et al. 2012). These studies based on patent data resulted in a wealth of policy implications, which, if implement ed, will have long-lasting impacts on economic growth and sustainability. This paper contributes the literature by providing a comparative study of the diffusion of clean technologies focusing on three different proxies, namely patent data (innovation), trade data (transfer) and production of energy from reneweable sources (diffusion). We focus on the sector of renewable electricity production due to two main reasons. First, power production plays a key role for energy security, sustainable growth and climate change (IEA 2010). Due to the willingness to promote economic growth while curbing greenhouse gas emissions and climate change impacts, electricity production is currently a key to most governments’ strategies for sustainable development. Second, electricity is a perfect case study because other proxies for technology diffusion and transfer can be identified. We provide two main contributions. First, a thorough description of renewable energy innovation and transfer dynamics worldwide. Second, a validation of the use of patent data as a proxy for technological change, and an analysis of whether such data can substitute or should only complement other proxies of technology transfer. Our analysis comprises both a descriptive approach and a more formal testing of the relation between patent statistics and other diffusion and transfer proxies through an econometric model. Our contribution is hence to provide a well- rounded assessment of renewable energy knowledge and technology flows across countries. Preliminary results show that trade and patent data provide to some extent similar insights: markets in which patent protection is sought by inventors of a given country are also among the most relevant trade- partners for that country. Moreover, countries where more patents are applied for are also the countries where installed capacity is greater. However, there are cases in which such correspondence does not hold, and hence solely relying on patent statistics might provide biased policy insights.

15:10

Panel discussion:

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Panel discussion:
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Environmental policies to enable innovation and transformation

H. De Coninck (Radboud University Nijmegen, Nijmegen, Netherlands)

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Environmental policies to enable innovation and transformation
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A perspective from the UNEP practice

L. Noronha

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A perspective from the UNEP practice
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J. Fan

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