Matthieu Glachant

Invention and Transfer of Climate Change Mitigation Technologies on a Global Scale: A Study Drawing on Patent Data

This paper uses the EPO/OECD World Patent Statistical Database (PATSTAT) to provide a quantitative description of the geographic distribution of inventions in thirteen climate mitigation technologies since 1978 and their international diffusion on a global scale. Statistics suggest that innovation has mostly been driven by energy prices until 1990. Since then, environmental policies, and climate policies more recently, have accelerated the pace of innovation. Innovation is highly concentrated in three countries—Japan, Germany and the USA—which account for 60% of total innovations. Surprisingly, the innovation performance of emerging economies is far from being negligible as China and South Korea together represent about 15% of total inventions. However, they export much less inventions than industrialized countries, suggesting their inventions have less value. More generally, international transfers mostly occur between developed countries (73% of exported inventions). Exports from developed countries to emerging economies are still limited (22%) but are growing rapidly, especially to China.

Non-binding voluntary agreements

Abstract In reality, most voluntary agreements (VAs) with polluters are not enforceable in the sense that no legal tools are available to enforce firms’ commitments. We examine whether such VAs are able to achieve an efficient level of environmental protection when they are obtained under the legislative threat of a pollution quota. We show that they can improve social welfare relative to legislative intervention when lobbying congress is very effective and when the polluter and the regulator do not discount future costs and benefits heavily. These findings suggest that VAs should be used selectively, taking into account sector characteristics and the degree of influence of lobbying on congress.

The Cost Efficiency of Voluntary Agreements for Regulating Industrial Pollution: A Coasean Approach

Voluntary agreements (VAs) are increasingly considered as a potentially useful environmental policy tool by practitioners. Even though VAs are very diverse, the type which is the most frequently encountered in reality is a collective agreement between a public authority and an industrial sector focusing on one particular industrial pollution concern and including a collective quantified pollution target to be met by the firms of the industry. Regarding these target-based VAs, the policy debate about their efficiency focuses on three main points: (i) Is the collective target set in the agreement socially satisfying? More precisely, it is questioned whether business participation into target setting results in too low environmental objectives. In some cases, it has been argued that targets are even lower than those that would have been reached in ‘business as usual’ conditions (Kolhaas et al., 1995). (ii) In many cases, VAs do not have any legal status. No formal sanctions are thus available in case of non compliance. It leads to enforcement concerns about these agreements which are weakened by potential free-riding behaviours of firms. (iii) Finally, the question of their cost-efficiency, especially in comparison with other policy options (economic instruments and direct regulation) is also under scrutiny.

Voluntary Agreements in a Rent-Seeking Environment

The paper analyses whether voluntary agreements with polluters (VAs) are able to achieve an efficient level of environmental protection when they are obtained under the legislative threat of an alternative stricter policy option. We develop a model in which the threat is a pollution quota. The threat is the outcome of a rent-seeking contest between a green and a polluter lobby group influencing the legislature. We show that a VA systematically emerges in equilibrium and that it leads to a more efficient level of pollution abatement than the legislative pollution quota. However this level is lower than the first best level of environmental protection. The paper also discusses various VA design aspects.

Greening Global Value Chains: Innovation and the International Diffusion of Technologies and Knowledge

Using novel data on patents, trade of equipment goods, and foreign direct investments and insights from the economic literature, the paper seeks to lay out the state of knowledge on the role of innovation and the diffusion of technologies in the greening of global value chains as well as some of the main policy issues. A special emphasis is put on developing countries -- distinguishing emerging economies and least-developed countries -- and on climate-mitigation technologies. Emerging economies are already reasonably well integrated in the global economy. As a consequence, technologies flow in through the imports of capital goods and local investments by multinational enterprises owning technologies. Pushing further technology transfer requires strengthening intellectual property rights, lowering barriers to trade and investments and improving technological absorptive capacities. In contrast, their role in innovation is limited. Standard tools of innovation policy - public research and development, public support to private research and development, better access to finance - should develop. But studies also suggest that governments should introduce more stringent environmental policies with proper enforcement at home to go beyond the adoption of foreign technologies. The situation of least-developed countries is very different: they do not import green technologies and low barriers to trade and foreign direct investment or strict intellectual property rights are unlikely to trigger technology transfer. In these countries, the focus should be on building technological capacities.

Voluntary Agreements under Endogenous Legislative Threats

The paper analyzes the welfare properties of voluntary agreements (VA) with polluters, when they are obtained under the legislative threat of an alternative stricter policy option. In the model, the threat is an abatement quota. Both the threat and its probability of implementation are endogenous. The latter is the outcome of a rent-seeking contest between a green and a polluter lobby group influencing the legislature. We show that a welfare-improving VA systematically emerges in equilibrium and that it is more efficient than the pollution quota. We also discuss various VA design aspects.

Technology Diffusion with Learning Spillovers: Patent versus Free Access

This paper analyses the interplay between technology diffusion and patent law. We develop a dynamic model where initial adoptions generate learning spillovers that reduce the cost of subsequent adoptions. In this setting, we contrast technology diffusion paths under competitive supply, subsidized adoption and patent protection. Competitive supply entails various coordination failures that cannot be fully fixed by public subsidy. We show that a patent holder can internalize externalities more efficiently, insofar as patent protection is fully effective. In contrast, fully competitive supply may be more efficient when patent enforcement is imperfect.

What role for climate negotiations on technology transfer

Little progress has been made in climate negotiations on technology since 1992. Yet the diffusion of climate change mitigation technologies to developing countries (non-Annex I) has increased dramatically over the last twenty years. The shift has mostly concerned emerging economies, which are now reasonably well connected to international technology flows. This is good news, as the bulk of emissions increases are expected to take place in these countries in the near future. In contrast, the least developed countries still appear to be excluded from international technology flows, mostly because of their negligible participation in the recent economic globalization. This article focuses on the policy implications of the contribution of climate negotiations to international technology diffusion. Policy relevance The discrepancy between the small amount of progress made in climate negotiations on technology since 1992 and the steady increase in the international diffusion of climate mitigation technologies leads to the perhaps controversial view that the diffusion of climate mitigation technologies does not need strong international coordination over technology issues under the UNFCCC. However, climate negotiations can play a key role in stimulating the demand for low-carbon technologies by setting ambitious emission reductions targets and policies.

The Incentives to North-South Transfer of Climate-Mitigation Technologies with Trade in Polluting Goods

The need to transfer climate mitigation technologies towards the developing world has been acknowledged since the beginning of climate negotiations. Little progress has however been made as shown by Article 10 of the Paris Agreement. One reason is that these technologies could become vital assets to compete on global markets. This paper presents a partial equilibrium model with two regions, the North and the South, and imperfect competition in the international polluting goods market to analyze the North’s incentives to accept technology transfer. Results crucially depend on the existence of environmental cooperation. When both northern and southern governments set emission quotas non-cooperatively, inducing fewer global emissions is a necessary, but not sufficient condition for the North to accept the transfer. In contrast, when governments set quotas cooperatively, the North never accepts the transfer because it only leads to a partial relocation of pollutant goods production to the South. We derive the implications for the global regulation of climate change.

How much does recycling reduce imports? Evidence from metallic raw materials

ABSTRACT In countries with limited exhaustible natural resources, reducing imports of raw materials is increasingly viewed as a significant side benefit of waste recycling. Using a panel of 21 developed and developing countries from 1994 to 2008, we seek to measure the size of this benefit by estimating the impact of metal scrap recovery on imports of metallic raw materials. We address the endogeneity of metal recovery with exogenous country characteristics including population density and the level of education. We also develop a strategy for controlling for the price volatility in raw material markets. We find that domestic metal recovery is substituted for imports of secondary raw materials while leaving imports of primary raw materials unaffected. The overall effect is a 3.3% decrease in imports of metallic raw materials when metal recovery grows by 10%. Thus, waste recycling policies may have a sizeable impact on trade balance and on security of raw material supply.