Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267709 
Year of Publication: 
2022
Series/Report no.: 
Economics Working Paper Series No. 22/377
Publisher: 
ETH Zurich, CER-ETH - Center of Economic Research, Zurich
Abstract: 
The paper applies the synthetic control method to examine the effects of California's Capand-Trade Program on environmental innovation. The analysis exploits the International Patent Classification system to identify patents relating to environmentally sound technologies. This enables the study to focus on the effects of the policy intervention on green patent filings. A counterfactual is constructed by the combination of other states in the US which allows the comparison of patent applications in California to the estimated counterfactual situation in the absence of a Cap-and-Trade program. The study finds that the number of patents related to green technologies increased by approximately 22.5% after the passing of the Cap-and-Trade regulation. This result is robust to alternative specifications of the synthetic control method.
Subjects: 
Induced Innovation
Environmental Policy
Climate Change
California Cap-and-Trade Program
JEL: 
Q55
Q58
O31
O38
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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