TY - JOUR
T1 - Environmental policy design, innovation and efficiency gains in electricity generation
AU - Johnstone, Nick
AU - Managi, Shunsuke
AU - Rodríguez, Miguel Cárdenas
AU - Haščič, Ivan
AU - Fujii, Hidemichi
AU - Souchier, Martin
N1 - Funding Information:
This research was funded by the Grant-in-Aid for Specially Promoted Research [26000001B]; the Ministry of Education, Culture, Sports, Science and Technology, and S15 of the Ministry of the Environment, Government of Japan. The results and conclusions of this article do not necessarily represent the views of the funding agencies. This paper is based on an earlier version available as OECD Environment Working Paper No. 104 (http://dx.doi.org/10.1787/5jm0t716kwmw-en). The opinions expressed here are those of the authors and do not necessarily reflect the official views of the OECD or of the governments of its member countries.
Publisher Copyright:
© 2017 Elsevier B.V.
PY - 2017/3/1
Y1 - 2017/3/1
N2 - This paper explores the relationship between environmental regulation, innovation, and competitiveness using environmental patent data. The analysis is conducted in two stages. First, a non-parametric frontier analysis is implemented to estimate efficiency scores, including a measure of technological innovation based on patent stocks. Second, econometric methods are applied to analyse the role of policy stringency and policy design on efficiency. Our estimation sample covers thermal power plant sectors in 20 countries from 1990 to 2009. The results show that the stringency of environmental regulations is a significant determinant of productive efficiency with respect to pollutant emissions as well as fuel use. However, these effects turn negative once the level of stringency leaps over a certain threshold. In addition, the paper concludes that the positive effect of regulatory stringency can be diminished by a negative effect of regulatory differentiation with measures which vary in stringency across plant size and age having negative consequences, and these effects are increasing over time. Finally, it is found that integrated approaches to environmental innovation are more likely to bring about efficiency improvements than end-of-pipe technologies.
AB - This paper explores the relationship between environmental regulation, innovation, and competitiveness using environmental patent data. The analysis is conducted in two stages. First, a non-parametric frontier analysis is implemented to estimate efficiency scores, including a measure of technological innovation based on patent stocks. Second, econometric methods are applied to analyse the role of policy stringency and policy design on efficiency. Our estimation sample covers thermal power plant sectors in 20 countries from 1990 to 2009. The results show that the stringency of environmental regulations is a significant determinant of productive efficiency with respect to pollutant emissions as well as fuel use. However, these effects turn negative once the level of stringency leaps over a certain threshold. In addition, the paper concludes that the positive effect of regulatory stringency can be diminished by a negative effect of regulatory differentiation with measures which vary in stringency across plant size and age having negative consequences, and these effects are increasing over time. Finally, it is found that integrated approaches to environmental innovation are more likely to bring about efficiency improvements than end-of-pipe technologies.
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U2 - 10.1016/j.eneco.2017.01.014
DO - 10.1016/j.eneco.2017.01.014
M3 - Article
AN - SCOPUS:85013297599
SN - 0140-9883
VL - 63
SP - 106
EP - 115
JO - Energy Economics
JF - Energy Economics
ER -