The effect of climate policy on innovation and economic performance along the supply chain A firm- and sector-level analysis

The paper empirically assesses the effect of climate policy stringency on innovation and economic performance, both directly on regulated sectors and indirectly through supply chain relationships. The analysis is based on a combination of firm- and sector-level data, covering 19 countries and the pe...

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Bibliographic Details
Main Author: Dechezleprêtre, Antoine
Other Authors: Kruse, Tobias
Format: eBook
Language:English
Published: Paris OECD Publishing 2022
Series:OECD Environment Working Papers
Subjects:
Online Access:
Collection: OECD Books and Papers - Collection details see MPG.ReNa
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520 |a The paper empirically assesses the effect of climate policy stringency on innovation and economic performance, both directly on regulated sectors and indirectly through supply chain relationships. The analysis is based on a combination of firm- and sector-level data, covering 19 countries and the period from 1990 to 2015. The paper shows that climate policies are effective at inducing innovation in low-carbon technologies in directly regulated sectors. It does not find evidence that climate policies induce significant innovation along the supply chain. In addition, there is no evidence that climate policies - through the channel of clean innovation - either harm or improve the economic performance of regulated firms. This supports the evidence that past climate policies have not been major burdens on firms' competitiveness, and that clean innovation may enable firms to compensate for the potential costs implied by new environmental regulations