Environmental and Resource Economics

, Volume 66, Issue 3, pp 497–536 | Cite as

Environmental Policy and the International Diffusion of Cleaner Energy Technologies

  • Elena Verdolini
  • Valentina Bosetti


Technology transfer is an important channel of technological change and sustainable development for countries with less innovative ability than technological leaders. This paper studies whether domestic environmental policies affect the inward technology transfer of cleaner innovation from abroad. We focus specifically on the power sector, for its important role in the decarbonization process, by looking at zero-carbon (renewable) and carbon-saving (efficient fossil) technologies for energy production. Using data on cross-country patent applications, we provide evidence that environmental policy contributes to attracting foreign cleaner technology options to OECD markets but not to non-OECD markets. We show that this is due to the nature of the implemented policy instruments. Market-based approaches positively impact technology transfer to both OECD and non-OECD economies, while non-market based approaches have at best only a weak effect in OECD countries. Domestic environmental policies may provide too weak a signal for foreign innovators in countries off the technological frontier. This calls for a strengthening of policy incentives for technology transfer in light of pressing climate change objectives.


Technology transfer Patents Energy technologies Environmental policy 

JEL Classification

O33 O34 Q55 


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Copyright information

© Springer Science+Business Media Dordrecht 2017

Authors and Affiliations

  1. 1.FEEM - Fondazione Eni Enrico Mattei - and Fondazione CMCC - Centro Euro-Mediterranneo sui Cambiamenti ClimaticiMilanItaly
  2. 2.Bocconi UniversityMilanItaly

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