Green Technology and Patents in the Presence of Green Consumers

CentER Discussion Paper Series No. 2019-020

46 Pages Posted: 23 May 2019

See all articles by Corinne Langinier

Corinne Langinier

University of Alberta - Department of Economics

Amrita Ray Chaudhuri

University of Winnipeg - Department of Economics; Tilburg University - Tilburg University School of Economics and Management; Tilburg Law and Economics Center (TILEC)

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Date Written: May 23, 2019

Abstract

We develop a theoretical framework to investigate the impact of patent policies and emission taxes on green innovation that reduces the emission output ratio, and on the emission level. In the absence of green consumers, the introduction of patents results in a paradox whereby increasing emission tax beyond a certain threshold leads to a discrete increase in the emission level, which may be avoided by reducing the patenting cost. In the presence of green consumers, this paradox is restricted to an intermediate range of tax rates, and at sufficiently high tax rates, reducing the patenting cost may increase the emission level. Also, higher emission taxes increase green investment only if the fraction of green consumers is sufficiently small, and the magnitude of this effect decreases as this fraction increases. Moreover, a stricter patentability requirement is only effective at reducing emissions if the fraction of green consumers is sufficiently small.

Keywords: Patent, Clean Technologies, Environmentally Friendly Consumers

JEL Classification: O34, L13, Q50

Suggested Citation

Langinier, Corinne and Ray Chaudhuri, Amrita, Green Technology and Patents in the Presence of Green Consumers (May 23, 2019). CentER Discussion Paper Series No. 2019-020, Available at SSRN: https://ssrn.com/abstract=3392933 or http://dx.doi.org/10.2139/ssrn.3392933

Corinne Langinier (Contact Author)

University of Alberta - Department of Economics ( email )

8-14 Tory Building
Edmonton, Alberta T6G 2H4
Canada

Amrita Ray Chaudhuri

University of Winnipeg - Department of Economics ( email )

Winnipeg, Manitoba R3B 2E9
Canada

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg Law and Economics Center (TILEC) ( email )

Warandelaan 2
Tilburg, 5000 LE
Netherlands

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