Aghion, Philippe
[Author]
;
Dechezleprêtre, Antoine
[Other];
Hemous, David
[Other];
Van Reenen, John
[Other];
Martin, Ralf
[Other]National Bureau of Economic Research
Carbon Taxes, Path Dependency and Directed Technical Change
Published:
Cambridge, Mass: National Bureau of Economic Research, December 2012
Published in:NBER working paper series ; no. w18596
Extent:
1 Online-Ressource
Language:
English
DOI:
10.3386/w18596
Identifier:
Reproduction note:
Hardcopy version available to institutional subscribers
Origination:
Footnote:
Mode of access: World Wide Web
System requirements: Adobe [Acrobat] Reader required for PDF files
Description:
Can directed technical change be used to combat climate change? We construct new firm-level panel data on auto industry innovation distinguishing between "dirty" (internal combustion engine) and "clean" (e.g. electric and hybrid) patents across 80 countries over several decades. We show that firms tend to innovate relatively more in clean technologies when they face higher tax-inclusive fuel prices. Furthermore, there is path dependence in the type of innovation both from aggregate spillovers and from the firm's own innovation history. Using our model we simulate the increases in carbon taxes needed to allow clean to overtake dirty technologies