Do climate policies affect green patenting patterns?

Abstract

This paper investigates the effect of Climate Change Policies (CCPs) on green innovation, for a sample of advanced and emerging market economies, and five economic sectors, during the period 2000-2021. Our results suggest that CCPs positively affect the production of green patents, with the effect intensifying gradually over time. The effect is larger for non-market-based and technology support policies-such as emission limits, feed tariffs and R&D subsidies-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-indifferences approach suggest that the positive effect of stricter CCPs on green innovation is stronger in sectors with limited financial constraints.