Corporate governance and green innovation

We study the relationship between corporate governance and firms׳ environmental innovation. Exploiting changes in antitakeover legislation in the US, we show that worse governed firms generate fewer green patents relative to all their innovations. This negative effect is greater for firms with a smaller share of institutional ownership, with a smaller stock of green patents, and with more binding financial constraints. Investigating regulatory and industry variations, we also find more pronounced effects for firms operating in states with lower pollution abatement costs, and in sectors less dependent on energy inputs. Overall, our results suggest that ineffective corporate governance may constitute a major obstacle to environmental efficiency.     

Directing technical change from fossil-fuel to renewable energy innovation: An application using firm-level patent data

In this paper we provide an analysis of directed technical change in the sector of electricity generation. We rely on patent data in fossil-fuel (FF) and renewable energy (REN) technologies for 5471 European firms over the 1978–2006 period. The novelty of our approach is in the focus on firm׳s heterogeneity in driving technological change. We make a distinction between small specialized firms, which innovate in only one type of technology, and large mixed firms, which innovate in both technologies, to analyse how REN patents can replace FF ones at the sector level both through a shift in innovation activities within existing firms and through firms׳ entry and exit. We use zero-inflated count data estimation techniques to identify the factors that affect specialized versus mixed firms׳ patenting behaviour both at the intensive (i.e., levels of innovation) and extensive (i.e., technological entry) margins. We further investigate the implications of our firm-level estimations for reducing the gap between REN and FF innovation at the aggregate level. We establish two key findings: (1) a decrease in the FF-REN technology gap mainly comes about through technological entry of specialized REN firms following an increase in REN market size; (2) increases in FF prices, FF market size, and FF knowledge stocks all increase the technology gap by increasing mixed firms FF innovation rates. An important implication of our results is that policies aimed at increasing REN innovation should focus on helping small firms to start and sustain innovation in the long-run.     

Innovation and diffusion of clean/green technology: Can patent commons help?

This paper explores the characteristics of 238 patents on 90 inventions contributed by major multinational innovators to the “Eco-Patent Commons”, which provides royalty-free access to third parties to patented innovations on green technologies. We compare the pledged patents to other patents in the same technologies or held by the same multinationals to investigate the motives of the contributing firms as well as the potential for such commons to encourage innovation and diffusion of climate change related technologies. We find pledged patents to protect environmentally friendly technologies and to be of similar value as the average patent in a pledging firm's patent portfolio but of lower value than other patents in their class. Our analysis of the impact of the patent commons on diffusion of patented technologies suggests that making patents accessible royalty-free did not result in any significant increase in diffusion as measured by citing patents. This study, therefore, indirectly provides evidence on the role of patents in the development and diffusion of green technologies.     

Costs and prices for renewable energy development in industrialized countries and applications to China

Developing renewable energy is now becoming a hot topic as it is important in dealing with climate change issue and energy supply issue. With the growing demand of energy, it has become urgent to develop the effective policies and measures that would enable people to maintain the living standards. Among all the measures, price is an essential one. In order to evaluate the costs and prices of the electricity from renewable energy sources (RES-E) and their effects to the market, this paper firstly focus on the extra costs of the RES-E by breaking it into four parts, including investment, construction, connection and operation. Then, the policy choices made in some typical industrialized countries are examined to find answers to the problems RES-E can raise. Finally, the choices made in China are examined in comparison to industrialized countries so as to determine how the current situation could be improved.     

Development of a low-carbon economy in China

Under the pressures of climate change, many countries are trying to adapt to a low-carbon economy. In this paper, we review the development pattern of the low-carbon economy of major countries and its impact on the world economy. We then argue that economic development and abatement of greenhouse gas (GHG) emissions in China should be balanced. The challenges that China faces should also be considered carefully. It is necessary for China to find an approach to solve the issues of climate change, which should include new technologies and establishing incentive mechanisms and reform-oriented policies. These guidelines can adjust the structure of the economy and energy use, improve energy efficiency, promote the development of alternative and renewable energy, enhance the potential of carbon sinks, and develop advanced technology to perfect a 'Clean Development Mechanism' and sustainable development through international cooperation.     

Do renewable energy policies reduce carbon emissions? On caps and inter-industry leakage

In a parsimonious two-sector general equilibrium model, we challenge the widely-held tenet that within a cap-and-trade system renewable energy policies have no effect on carbon emissions. If the cap does not capture all sectors, we demonstrate that variations of a renewable energy subsidy change aggregate carbon emissions through an inter-industry leakage effect. We decompose this effect into intuitively intelligible components that depend in natural ways on measurable elasticity parameters. Raising the subsidy always reduces emissions if funded by a lump-sum tax, reinforcing recent findings that tightening environmental regulation can cause negative leakage. However, if the subsidy is funded by a levy on electricity, it can increase emissions. These results provide a valuable basis for an informed design of renewable energy policies and an accurate assessment of their effectiveness. We highlight how a state-of-the-art statistic used by governments to gauge such effectiveness, “virtual emission reductions”, is biased, because inter-industrial leakage effects are not captured.     

The optimal time path of clean energy R&D policy when patents have finite lifetime

We study the optimal time path for clean energy innovation policy. In a model with emission reduction through clean energy deployment, and with R&D increasing the overall productivity of clean energy, we describe optimal R&D policies jointly with emission pricing policies. We find that while emission prices can be set at the Pigouvian level independently of innovation policy, the optimal level of R&D subsidies and patent lifetime change with the stages of the climate problem. In the early stages of clean energy development, innovators find it more difficult to capture the social value of their innovations. Thus, for a given finite patent lifetime, optimal clean energy R&D subsidies are initially high, but then fall over time. Alternatively, if research subsidies are kept constant, the optimal patent lifetime should initially be long and fall over time.     

Non-cooperative and cooperative climate policies with anticipated breakthrough technology

Global warming can be curbed by pricing carbon emissions and thus substituting fossil fuel with renewable energy consumption. Breakthrough technologies (e.g., fusion energy) can reduce the cost of such policies. However, the chance of such a technology coming to market depends on investment. We model breakthroughs as an irreversible tipping point in a multi-country world, with different degrees of international cooperation. We show that international spill-over effects of R&D in carbon-free technologies lead to double free-riding, strategic over-pollution and underinvestment in green R&D, thus making climate change mitigation more difficult. We also show how the demand structure determines whether carbon pricing and R&D policies are substitutes or complements.     

Government green procurement spillovers: Evidence from municipal building policies in California

We study how government green procurement policies influence private-sector demand for similar products. Specifically, we measure the impact of municipal policies requiring governments to construct green buildings on private-sector adoption of the US Green Building Council?s Leadership in Energy and Environmental Design (LEED) standard. Using matching methods, panel data, and instrumental variables, we find that government procurement rules produce spillover effects that stimulate both private-sector adoption of the LEED standard and investments in green building expertise by local suppliers. These findings suggest that government procurement policies can accelerate the diffusion of new environmental standards that require coordinated complementary investments by various types of private adopter.     

Die externen Kosten der Stromerzeugung aus erneuerbaren Energien im Vergleich zur fossilen Stromerzeugung

Aim and Background

The supply and use of energy is related to environmental impacts, which cause significant economic damage. As these costs are not reflected in the price of energy, there is little incentive for the polluter to reduce the pressure on the environment. From an economic point of view, environmental resources and services are used beyond the optimal level. The quantification of external costs has been an area of intensive research, in particular within the series of ExternE projects funded by the European Commission. Although external cost estimates have been successfully used to support European environmental legislation, the assessment of external costs is still a matter of significant uncertainties — in particular in areas were potential large environmental impacts are expected. In spite of uncertainty and limited knowledge, policy needs to require guidelines for the evaluation of energy and environmental policy measures.

Main Features

Based on a critical review of the current literature, recommendations for the quantification of external costs from renewable electricity generation in comparison to fossil nuclear technologies are derived.

Results and Discussion

Current electricity market prices do not reflect the total costs of electricity generation. Quantifiable external costs from fossil electricity generation are in the same order as private generation costs. The internalisation of external costs will improve the competitiveness of renewable energy technologies. To avoid market distortion, policy shall implement framing conditions supporting the further internalisation of external costs.

Conclusions

Costs for supporting renewable energy via the German feed-in tariffs are compensated for by external costs avoided.

Perspectives

Fossil and nuclear energies are more expensive than is teflected by economical quantification. In contrast, the costs for renewable energies tell the truth even today. The sooner the external costs are integrated in the pricing, the sooner the relaunch of energy supply will attract interest, also from the economic point of view.     

Revealing climate change opinions through investment behavior: Evidence from Fukushima

In this study we present a novel research approach to obtaining behavior-based evidence of regional climate change attitudes, using the 2011 Fukushima nuclear plant incident as a natural experiment. Our approach allows us to produce the first non-survey-based empirical evidence of a trans-Atlantic divide in public opinion on the environment and climate change that investors assign to fossil-based and renewable energy. This value is based on the perceived potential of these fuel types to substitute for nuclear generation in the aftermath of the Fukushima crisis. We carry out an event study to examine differences in abnormal returns of global coal and renewable energy companies on European and American stock exchanges. We find that investors trading on U.S. markets exhibit a significantly more favorable perception of coal stock profitability, while investors trading on European exchanges display a more favorable perception about profitability of renewable energy stocks.     

Green,greener, greenest: Eco-label gradation and competition

This paper analyzes two common features of markets in which eco-label programs certify that products are “green”: gradation—single programs offering multiple certification standards (e.g., platinum, gold, silver)—and competition—multiple programs vying to certify to their respective standards. We find that, depending on whether programs are sponsored by industry, environmental groups, or a government, they have strikingly different incentives to grade or compete. Industry sponsors are indifferent about both; environmentalist sponsors optimally grade or compete with other environmentalist sponsors only if consumer preferences for green consumption are skewed in a specific way; and government sponsors׳ decisions depend on the relative importance of private vs. public benefits generated by the green market. We find also that it is no accident that green markets frequently have an environmentalist program competing with an industry one. For each of the cases examined, our analysis is consistent with casual empirical evidence.     

略论绿色营销

当今全球环保思潮的冲击和绿色消费的方兴未艾，企业如果沿袭传统的营销方式，必将被淘汰．企业要想生存发展，并在竞争中立于不败之地，必须适应新的形势，改弦易辙，实施绿色营销，以满足人们的无污染、无公害、延年益寿的需求．本文讨论了绿色营销的现状及其对企业发展的影响，并提出了实施绿色营销的战略对策．     

Economic growth,international trade,and the depletion or conservation of renewable natural resources

Conservation of renewable natural resources and promotion of economic growth are both sustainable development goals. Here, we study the interdependency between economic growth, international trade, and the use of renewable natural resources—under alternative institutional settings of either open access or full property rights—in an endogenous growth model. We find that if the resource is depleted over time, consumption growth is reduced. Economic growth and international trade only impact resource use when the resource is harvested under full property rights. Then, widening international trade can lead countries to shift from conservation to depletion. Changes in the institutional setting of resource use in one country may have repercussions on trading partners. Our results indicate potential trade-offs between the sustainable development goals and imply that policies focusing on resource use or trade (e.g., international trade bans or certified trade) are not sufficient to prevent resource depletion.     

The higher price of cleaner fuels: Market power in the rail transport of fuel ethanol

This paper provides evidence of market power in the transportation of ethanol used in reformulated gasoline and alternative transportation fuels. I estimate a reduced form model for railroad route-level prices. My identification strategy instruments for railroad entry, controls for selection and explicitly models capacity constraints. A detailed understanding of this industry is important because U.S. environmental policies seek to substantially expand ethanol use. Evidence of market power may alter the types of policies pursued by lawmakers. I find that ethanol shipment prices are lower for more competitive routes. I also find evidence that railroads price discriminate based on environmental regulation at route destinations. Monopolist prices for shipments to carbon monoxide non-attainment areas are 3% higher than shipments to other destinations. This price premium falls sharply with increased competition. This suggests a perverse result where environmental regulation increases the price of a clean input.     

Social,environmental, and economic consequences of integrating renewable energies in the electricity sector: a review

The global shift from a fossil fuel-based to an electrical-based society is commonly viewed as an ecological improvement. However, the electrical power industry is a major source of carbon dioxide emissions, and incorporating renewable energy can still negatively impact the environment. Despite rising research in renewable energy, the impact of renewable energy consumption on the environment is poorly known. Here, we review the integration of renewable energies into the electricity sector from social, environmental, and economic perspectives. We found that implementing solar photovoltaic, battery storage, wind, hydropower, and bioenergy can provide 504,000 jobs in 2030 and 4.18 million jobs in 2050. For desalinization, photovoltaic/wind/battery storage systems supported by a diesel generator can reduce the cost of water production by 69% and adverse environmental effects by 90%, compared to full fossil fuel systems. The potential of carbon emission reduction increases with the percentage of renewable energy sources utilized. The photovoltaic/wind/hydroelectric system is the most effective in addressing climate change, producing a 2.11–5.46% increase in power generation and a 3.74–71.61% guarantee in share ratios. Compared to single energy systems, hybrid energy systems are more reliable and better equipped to withstand the impacts of climate change on the power supply.

     

Green chemistry with process intensification for sustainable biodiesel production

Biodiesel as a renewable fuel has the potential to replace non-renewable fossil fuels and associated environmental pollution. The most commonly used method in biodiesel production is transesterification of virgin and used oil feedstock. However, the chemical reaction (transesterification) does not proceed spontaneously, which means excess reactants are required to move the reaction to completion. The biodiesel reaction efficiency can be improved by incorporating green chemistry principles and process intensification effects. Green chemistry principles can be used to design chemical products and processes that reduce or eliminate the use and generation of hazardous substances. Microwave- and ultrasound-enhanced biodiesel synthesis can improve the reaction efficiency due to higher product recovery, low by-product formation, and reduced energy consumption. In addition, utilization of green metrics such as E-factor, atom economy (utilization), mass intensity or mass productivity, and reaction mass efficiency can help design safer and highly efficient biodiesel synthesis. Green chemistry principles have been analyzed for other processes in greater details, but they are rarely discussed in the context of biodiesel production. Process intensification by microwave- and ultrasound-mediated biodiesel production was never discussed from the perspective of green chemistry and sustainable process development. This research review article discusses the role of green chemistry and process intensification in biodiesel production followed by specific examples and illustrations on green metrics of microwave- and ultrasound-enhanced biodiesel synthesis and the effect of catalysts and solvents including discussions on reaction kinetics and activation energy in detail for the first time in the literature.     

Cost,environmental impact,and resilience of renewable energy under a changing climate: a review

Energy derived from fossil fuels contributes significantly to global climate change, accounting for more than 75% of global greenhouse gas emissions and approximately 90% of all carbon dioxide emissions. Alternative energy from renewable sources must be utilized to decarbonize the energy sector. However, the adverse effects of climate change, such as increasing temperatures, extreme winds, rising sea levels, and decreased precipitation, may impact renewable energies. Here we review renewable energies with a focus on costs, the impact of climate on renewable energies, the impact of renewable energies on the environment, economy, and on decarbonization in different countries. We focus on solar, wind, biomass, hydropower, and geothermal energy. We observe that the price of solar photovoltaic energy has declined from $0.417 in 2010 to $0.048/kilowatt-hour in 2021. Similarly, prices have declined by 68% for onshore wind, 60% for offshore wind, 68% for concentrated solar power, and 14% for biomass energy. Wind energy and hydropower production could decrease by as much as 40% in some regions due to climate change, whereas solar energy appears the least impacted energy source. Climate change can also modify biomass productivity, growth, chemical composition, and soil microbial communities. Hydroelectric power plants are the most damaging to the environment; and solar photovoltaics must be carefully installed to reduce their impact. Wind turbines and biomass power plants have a minimal environmental impact; therefore, they should be implemented extensively. Renewable energy sources could decarbonize 90% of the electricity industry by 2050, drastically reducing carbon emissions, and contributing to climate change mitigation. By establishing the zero carbon emission decarbonization concept, the future of renewable energy is promising, with the potential to replace fossil fuel-derived energy and limit global temperature rise to 1.5 °C by 2050.

     

Substitution between biofuels and fossil fuels: Is there a green paradox?

We show that (i) subsidies for renewable energy policies with the intention of encouraging substitution away from fossil fuels may accentuate climate change damages by hastening fossil fuel extraction, and that (ii) the opposite result holds under some specified conditions. We focus on the case of subsidies for renewable resources produced under increasing marginal costs, and assume that both the renewable resources and the fossil fuels are currently in use. Such subsidies have a direct effect and an indirect effect working in opposite directions. The direct effect is the reduction in demand for fossil fuels at any given price. The indirect effect is the reduction in the current equilibrium price for fossil fuels, which tends to increase the amount of fossil fuels demanded. Whether the sum of the two effects will actually result in an earlier or later date of exhaustion of the stock of fossil fuels depends on the curvature of the demand curve for energy and of the supply curve for the renewable substitute.     

Substitution between biofuels and fossil fuels: Is there a green paradox?

We show that (i) subsidies for renewable energy policies with the intention of encouraging substitution away from fossil fuels may accentuate climate change damages by hastening fossil fuel extraction, and that (ii) the opposite result holds under some specified conditions. We focus on the case of subsidies for renewable resources produced under increasing marginal costs, and assume that both the renewable resources and the fossil fuels are currently in use. Such subsidies have a direct effect and an indirect effect working in opposite directions. The direct effect is the reduction in demand for fossil fuels at any given price. The indirect effect is the reduction in the current equilibrium price for fossil fuels, which tends to increase the amount of fossil fuels demanded. Whether the sum of the two effects will actually result in an earlier or later date of exhaustion of the stock of fossil fuels depends on the curvature of the demand curve for energy and of the supply curve for the renewable substitute.