Policy-induced innovation in clean technologies: Evidence from the car market

Rik Rozendaal; Herman Vollebergh

doi:10.1086/731834

Policy-induced innovation in clean technologies: Evidence from the car market

Rik Rozendaal^*
, Herman Vollebergh

^*Corresponding author for this work

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Abstract

This article analyzes the effects of fuel economy and greenhouse gas emission standards on the direction of innovation. We develop an intuitive measure of standard stringency that captures the policy's most important attributes for the incentive to innovate. To test the role of standards, prices and taxes for the innovation decision, we construct a firm-level panel of patents in clean and dirty automotive technologies for the years 2000-2016. Our results indicate that standards are a robust driver inducing zero emission technologies in the car market, while taxes also play a role. The effect of standards is driven by patenting for electric vehicle and hydrogen fuel cell technologies. We find no evidence that these policies negatively impact dirty innovation.

Original language	English
Pages (from-to)	565-598
Number of pages	34
Journal	Journal of the Association of Environmental and Resource Economists
Volume	12
Issue number	3
DOIs	https://doi.org/10.1086/731834
Publication status	Published - May 2025

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

Keywords

Environmental policy instruments, regulatory stringency, innovation, directed technical change
Regulatory stringency
innovation
directed technical change

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10.1086/731834

Policy-induced innovation in clean technologiesFinal published version, 1.98 MBLicence: Taverne

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Rozendaal, R. (Creator) & Vollebergh, H. (Creator), Harvard Dataverse, 8 Jun 2024
DOI: 10.7910/DVN/1ZGBZG, https://dataverse.harvard.edu/dataset.xhtml?persistentId=doi:10.7910/DVN/1ZGBZG
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Cite this

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title = "Policy-induced innovation in clean technologies: Evidence from the car market",

abstract = "This article analyzes the effects of fuel economy and greenhouse gas emission standards on the direction of innovation. We develop an intuitive measure of standard stringency that captures the policy's most important attributes for the incentive to innovate. To test the role of standards, prices and taxes for the innovation decision, we construct a firm-level panel of patents in clean and dirty automotive technologies for the years 2000-2016. Our results indicate that standards are a robust driver inducing zero emission technologies in the car market, while taxes also play a role. The effect of standards is driven by patenting for electric vehicle and hydrogen fuel cell technologies. We find no evidence that these policies negatively impact dirty innovation.",

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Policy-induced innovation in clean technologies: Evidence from the car market

Abstract

UN SDGs

Keywords

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