The impact of green innovation on energy intensity

This report commissioned by the Swiss Federal Office of Energy analyzes the impact of green innovation on energy intensity in a set of 14 industrial sectors in 18 OECD countries over the 1975-2005 period. We create a stock of green patents for each industrial sector and estimates a translog cost function to measure the impact of green innovation, next to other factors such as input substitution and autonomous technical change, on energy intensity. We find that green innovation has contributed to the decline in energy intensity in the majority of sectors: the median elasticity of energy intensity with respect to green patenting is estimated at -0.03 in our sample. Hence, a 1% increase in green patenting activities in a given sector is associated with a 0.03% decline in energy intensity. Our results also show that other factors, such as input substitution and autonomous technical change, play an important role in explaining the decline in energy intensity per sector.

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