The co2 question: technical progress and the climate crisis

Abstract

the co2 question: technical progress and the climate crisis1 preliminary patrick bolton* marcin kacperczykω moritz wiedemannδ september 7, 2022 abstract who engages in green r&d and how is corporate behavior affected by green technical progress? based on global patent filings, corporate financial reporting, and corporate carbon emissions we analyze corporate green and brown r&d activity and its effects in reducing carbon emissions. we find consistent support for the path-dependence hypothesis of innovation. in each sector around the world innovating companies with higher carbon emissions tend to engage more in brown r&d and less in green r&d. despite a consistent rise in the share of green r&d over our sample period we find little effect of green innovation on future carbon emissions. direct emissions of green innovating companies are not significantly affected by green innovation across all sectors and around the world, whether in the short term (one year after filing a green patent) or in the medium term (three years after filing). however, we find weak evidence of a small reduction in indirect upstream emissions following green patent filings. jel codes g12, g23, g30, d62, d83 keywords: carbon emissions, green patents, brown efficiency patents, path dependence of innovation, jevons paradox. * columbia university, imperial college, cepr, and nber. ω imperial college and cepr δ imperial college 1 we are grateful to trucost for giving us access to their corporate carbon …

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