► We find new evidence in support of both the strong and weak Porter hypotheses, taking a sector based perspective for EU15 over the decade 1996–2007, since environmental and energy taxation does not ...undermine EU export flows and rather improves them in most observed cases. ► Though sector heterogeneity is emerging as expected, the Porter hypotheses are validated even in the short term effect of regulatory actions. ► Nevertheless, the PH is not to be taken for granted: it is sector-specific, as well as policy instrument-specific. ► Innovation intensity primarily captured by patents shows positive and robust effects over export competitiveness across the whole technological ladder, with a stronger impact on higher technology sectors. ► It is important to avoid overlapping in public actions stimulating innovation through direct and induced mechanisms.
This paper aims at exploring how the export competitiveness of the European Union has been affected by environmental regulation and innovation. Starting from the Porter idea that environmental policies may foster international competitiveness by inducing technological innovation. We test both the strong and narrowly strong versions of the Porter hypothesis, in order to understand if such a virtuous cycle is confined into the environmental goods sector (respecting the narrow criterion) or it spreads out through the whole economic system. For this purpose we adopt a theoretically based gravity model applied to the export dynamics of five aggregated manufacturing sectors classified by their technological or environmental content.
When testing the strong version, the overall effect of environmental policies does not seem to be harmful for export competitiveness of the manufacturing sector, whereas specific energy tax policies and innovation efforts positively influence export flows dynamics, revealing a Porter-like mechanism. When testing the narrowly strong version, environmental policies, but more incisively environmental innovation efforts, foster green exports. These results show that public policies and private innovation patterns both trigger higher efficiency in the production process through various complementarity mechanisms, thus turning the perception of environmental protection actions as a production cost into a net benefit.
•The paper examines the role of demand-pull and technology-push policies in explaining innovation performance in the biofuels sector.•In mature technologies demand-pull policies have a greater impact ...on innovation dynamics than technology-push instruments.•In less mature technologies innovation is spurred by both demand-pull and technology-push instruments.•In less mature technologies price-based instruments are more effective in fostering innovation activities than quantity-based instruments.
The purpose of this paper is to explore the differentiated impact of demand-pull and technology-push policies in shaping technological patterns in the biofuels sector. The empirical analysis is based on a novel and original database (BioPat) containing patents in the field of biofuels selected using appropriate keywords and classified according to the technological content of the invention. Our results generally show that technological capabilities and environmental regulation spur innovative activities in the biofuels sector. Both demand-pull and technology-push factors are found to be important drivers of innovation in the biofuels sector. However, technology exploitation activities in first generation technologies are found to be mainly driven by quantity and price-based demand-pull policies. On the contrary, the pace of technology exploration efforts in advanced generation biofuels is shown to react positively to price-based demand-pull incentives but also to technology-push policy. The clear diversity in the impact of different public support instruments provides new insights which fuel discussion on the optimal policy mix debate and offers new elements for the design of future policy strategies.
The increasing attention given to global energy issues and the international policies needed to reduce greenhouse gas emissions have given a renewed stimulus to research interest in the linkages ...between the energy sector and economic performance at country level. In this paper, we analyse the causal relationship between economy and energy by adopting a Vector Error Correction Model for non-stationary and cointegrated panel data with a large sample of developed and developing countries and four distinct energy sectors. The results show that alternative country samples hardly affect the causality relations, particularly in a multivariate multi-sector framework.
The achievement of positive Environmental Performance (EP) at national level could strongly depend on differences in regional features, namely productive specialization, regulation stringency and ...innovation capabilities of both public institutions and the private business sector. We present empirical evidence for a newly released NAMEA available for the 20 Italian regions in order to demonstrate the role played by sector innovation, regional spillovers and environmental policies. The Italian North–south divide regarding industrial development and productive specialization patterns seems to affect regional EP. Nonetheless, such a pattern presents some interesting differences, revealing a more heterogeneous distribution of emissions which may reflect the role of other driving forces. In particular, agglomerative effects seem to play a major role and the EP of neighboring regions influences the regional internal EP. This means that together with the spatial concentration of specific sectors into restricted areas, there is also some convergence in the adoption of cleaner or dirtier production process techniques. Finally, interregional technological spillovers are more important than sector internal innovation for improving EP, revealing that accounting for spatial features and linking ecological economics to regional economics are crucial in understanding the key drivers of EP.
► Agglomerative effects seem to influence environmental performance at regional level. ► Technological and environmental spillovers are relevant for sector environmental efficiency. ► For global pollutants, environmental spillovers play a significant role. ► Technological spillovers drive environmental efficiency more than internal innovation.
The European Union’s relative disregard for the economic, geopolitical and climatic concerns of its peripheral Eastern countries has contributed to making the war in Ukraine possible. Its ...consequences are now returning in the form of energy dependence and economic instability on the Union as a whole and the risk of economic crisis and deindustrialisation. This should prompt a re-assessment of the EU’s strategy towards its eastern neighbours, particularly in the energy and climate policy field. This evaluation starts from the issue of control over cheap energy as a key material foundation of state and interstate power. On this basis, we analyse the struggle between Russia and the European core states over Ukraine in terms of the ability to extract an economic surplus through the unequal exchange of energy. The current escalation should be understood as an attempt by the Russian petrostate to preserve the economic basis of its regime, which is threatened by the prospect of a low-carbon transition in Europe. We conclude that a massive acceleration of the transition away from fossil fuels is the key to economic, geopolitical and climate stabilisation, highlighting possible policy instruments the EU could use to secure its production system and protect citizens’ security.
The European Union (EU) has developed a strategy to mitigate climate change by cutting greenhouse gas (GHG) emissions and fostering low carbon technologies. However, the risk of implementing ...unilateral policies is that distortive effects are generated at the global scale affecting world energy prices, international competitiveness and the geographical allocation of carbon intensive production processes. Using a dynamic CGE model, we assess the rate of carbon leakage and adverse impacts on competitiveness in a number of scenarios over the period 2010–2050. According to the model results, we highlight two major issues. First, in the case of a unilateral EU climate policy, carbon leakage and negative effects on competitiveness are quite serious. Anti-leakage measures can only mitigate leakage and adverse economic impacts on competitiveness in a limited way. On the contrary, an optimality analysis addressing the environmental effectiveness, cost-effectiveness and political feasibility of alternative policy solutions reveals that the EU long term decarbonisation strategy by investing in energy efficiency and renewable energy might ensure protection of vulnerable manufacturing activities while enhancing the competitiveness of technologically-advanced industries.
The rapid decarbonization of the global economy represents the main challenge for the next decades to combat climate change. The European Union (EU) is leading the negotiation process under the Paris ...Agreement and recently approved an ambitious unilateral mitigation strategy known as the European Green Deal (EGD). In this paper, we present a novel approach based on the analysis of patent data related to climate change and mitigation technologies (CCMTs) with the aim of describing the evolutionary pattern of the EU in green technology. Based on our analysis, two of our main results deserve attention. First, at the global level, the pace of generation of new green technologies as measured by patent data is slowing down in recent years. This trend, if not inverted, casts some doubts on the economic sustainability of the ambitious environmental targets set by the EC. Second, the current EU technological positioning with respect to green areas appears to be problematic in terms of technological sovereignty, with serious risks of potential technological dependences from other countries. Given the radical technological shift required for the implementation of a full decarbonization pattern, the EU must realize a mission-oriented technology policy with additional and directed investments to ensure technological independence, together with a low-carbon and energy secure economy.
Many industrialized countries have introduced environmental policy measures in order to reduce negative externalities linked to economic activities. These policy actions produce different effects on ...the economic system depending on the regulatory tools adopted and the specific objective of public intervention. The impact on innovation is particularly difficult to predict, especially with regard to the direction of technological change. As a case study, we have chosen the energy sector, in which the strong interrelations between socio-economic and technological dimensions may exacerbate the negative consequences of implementing conflicting policies. The aim of this paper is to show how the lack of strong coordination between different public policies implemented in the energy sector may lead to an incoherent policy mix with negative effects on the development and diffusion of environmentally-friendly energy technologies. We have adopted a gravity equation model based on bilateral export flows of technologies for production and consumption of renewable energies and energy-saving technologies for OECD countries. Our key findings show that alternative measures of public support in the energy sector have been producing contrasting effects on the international competitiveness of energy technologies.
In a scenario characterised by mitigation concerns and calls for greater resilience in the energy sector, energy audits (EAs) emerge as an essential mean for enhancing end-use energy consumption ...awareness and efficiency. Such a tool allows us to assess the different energy carriers consumed in a productive sector, offering insight into existing energy efficiency improvement opportunities. This opens avenues for research to devise an econometrics-based methodology that encapsulate production sites and their environmental essentials. This paper contributes to the literature by exploiting the EAs received by the Italian National agency for New technologies, Energy, and Sustainable Economic Development (ENEA) in 2019 from the Italian plastics manufacturing sector, matched with Italian firm-based data extracted from the Analisi Informatizzata delle Aziende Italiane (Italian company information and business intelligence) (AIDA) database. In particular, we investigate how the implementation of energy efficiency measures (EEMs) is influenced by a set of contextual factors, as well as features relating to the companies and EEMs themselves. The empirical investigation focuses on the EAs submitted to ENEA in 2019, which was strategically chosen due to its unique data availability and adequacy for extensive analysis. The selection of 2019 is justified as it constitutes the second mandatory reporting period for energy audits, in contrast to the 2022 data, which are currently undergoing detailed refinement. In line with the literature, the adopted empirical approach involves the use of both the OLS and logistic regression models. Empirical results confirm the relevance of economic and financial factors in guiding the decisions surrounding the sector’s energy performance, alongside the analogous influence of the technical characteristics of the measures themselves and of the firms’ strategies. In particular, the OLS model with no fixed effects shows that a one-percent variation in investments is associated with an increase in savings performance equal to 0.63%. As for the OLS model, including fixed effects, the elasticity among the two variables concerned reaches 0.87%, while in the logistic regression, if the investment carried out by the production sites increases, the expected percentage change in the probability that the energy-saving performance is above its average is about 187.77%. Contextual factors that prove to be equally influential include the incentive mechanism considered and the traits of the geographical area in which the companies are located. Relevant policy implications derived from this analysis include the importance of reducing informational barriers about EEMs and increasing technical assistance, which can be crucial for identifying and implementing effective energy solutions.
A dynamic climate-economy CGE model based on the GTAP framework is used to analyse how sensitive simulation results are to alternative values assumed by several types of elasticity of substitution in ...energy-related linkages. Input substitutability in the production function is also tested for the relationship between capital and energy in different manufacturing sectors. The simulation exercise reveals that the model produces highly differentiated results when different sets of elasticity parameters are adopted. As a general result, lower substitutability values correspond to a reduction in the flexibility of energy substitution possibilities, making carbon abatement efforts more expensive. Moreover, this restriction generates changes in the distribution of costs associated with abatement efforts across regions. This brings to severe implications on international competitiveness especially for energy-intensive industrial sectors. The direct implication derived from this work is that in order to use CGE models to assess the amount and distribution of mitigation costs and to inform the international community involved in discussing the feasibility of climate policies, the use of empirically estimated behavioural parameters at the highest possible disaggregation level is highly recommended.
•Sensitivity to energy substitution elasticities in a climate CGE model is tested.•More reliable results on decoupling trends from growth to emissions are found.•Lower elasticities make abatement efforts more expensive for the whole economy.•Different values generate changes in distribution of mitigation cost across regions.•Exact value of such parameters is a necessary condition for CGE result reliability.
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