Green Technology and Patents in the Presence of Green Consumers

Corinne Langinier, A. Ray Chaudhuri

Research output: Working paperDiscussion paperOther research output

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Abstract

We develop a theoretical framework to investigate the impact of patent policies and emission taxes on green innovation that reduces the emission output ratio, and on the emission level. In the absence of green consumers, the introduction of patents results in a paradox whereby increasing emission tax beyond a certain threshold leads to a discrete increase in the emission level, which may be avoided by reducing the patenting cost. In the presence of green consumers, this paradox is restricted to an intermediate range of tax rates, and at sufficiently high tax rates, reducing the patenting cost may increase the emission level. Also, higher emission taxes increase green investment only if the fraction of green consumers is sufficiently small, and the magnitude of this effect decreases as this fraction increases.Moreover, a stricter patentability requirement is only effective at reducing emissions if the fraction of green consumers is sufficiently small.
Original languageEnglish
Place of PublicationTilburg
PublisherCentER, Center for Economic Research
Number of pages46
Volume2019-020
Publication statusPublished - 23 May 2019

Publication series

NameCentER Discussion Paper
Volume2019-020

Fingerprint

Green consumers
Patents
Emission taxes
Tax rate
Patenting
Paradox
Costs
Theoretical framework
Patent policy
Green innovation

Keywords

  • patent
  • clean technologies
  • environmentally friendly consumers

Cite this

Langinier, C., & Ray Chaudhuri, A. (2019). Green Technology and Patents in the Presence of Green Consumers. (CentER Discussion Paper; Vol. 2019-020). Tilburg: CentER, Center for Economic Research.
Langinier, Corinne ; Ray Chaudhuri, A. / Green Technology and Patents in the Presence of Green Consumers. Tilburg : CentER, Center for Economic Research, 2019. (CentER Discussion Paper).
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Langinier, C & Ray Chaudhuri, A 2019 'Green Technology and Patents in the Presence of Green Consumers' CentER Discussion Paper, vol. 2019-020, CentER, Center for Economic Research, Tilburg.

Green Technology and Patents in the Presence of Green Consumers. / Langinier, Corinne; Ray Chaudhuri, A.

Tilburg : CentER, Center for Economic Research, 2019. (CentER Discussion Paper; Vol. 2019-020).

Research output: Working paperDiscussion paperOther research output

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N2 - We develop a theoretical framework to investigate the impact of patent policies and emission taxes on green innovation that reduces the emission output ratio, and on the emission level. In the absence of green consumers, the introduction of patents results in a paradox whereby increasing emission tax beyond a certain threshold leads to a discrete increase in the emission level, which may be avoided by reducing the patenting cost. In the presence of green consumers, this paradox is restricted to an intermediate range of tax rates, and at sufficiently high tax rates, reducing the patenting cost may increase the emission level. Also, higher emission taxes increase green investment only if the fraction of green consumers is sufficiently small, and the magnitude of this effect decreases as this fraction increases.Moreover, a stricter patentability requirement is only effective at reducing emissions if the fraction of green consumers is sufficiently small.

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Langinier C, Ray Chaudhuri A. Green Technology and Patents in the Presence of Green Consumers. Tilburg: CentER, Center for Economic Research. 2019 May 23. (CentER Discussion Paper).