Seminar: The European Carbon Market and Technological Change
Date(s): November 4, 2015, 1:30-3:00 pm
Location: Room 4128, William Jefferson Clinton West Building, 1301 Constitution Ave., NW, Washington, DC
Presenter(s): Raphael Calel (McCourt School of Public Policy, Georgetown University)
Description: This presentation will cover my recent work on 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 companies. In an EU-wide study, we find evidence that the EU ETS has increased low-carbon patenting 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 impacted 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. In a second study focused on the UK, I find further preliminary evidence that this increase in low-carbon patenting is backed up by increased spending on research and development of new low-carbon technologies. However, there is no evidence yet that this increase in low-carbon innovation has permitted EU ETS regulated companies to reduce the carbon intensity of their output faster than the economy as a whole.
Seminar Category: Climate Economics