Analysis and Evaluation of Climate Change Policies and their Interaction with Technological Change

Abstract

The core analysis of this work is divided in three different but thematically related studies, analysing, first, how climate change policies can help to limiting global warming and one of its direct causes, the emission of greenhouse gases (GHG); second, how such policies can foster “green” technological change; and, third, how technological change can help to reach ambitious policy goals outlined in Europe’s 2020 climate and energy package.

Respectively, in the first work with the title “Emission Abatement: Untangling the effects of the EU ETS and the Economic Crisis”, I seek to untangle the effects of the European Union Emission Trading System (EU EST) against the impact of the economic crisis 2008/2009 with respect to GHG emissions for sectors subject to the policy. Thereby, an Arellano-Bond regression is performed due to the dynamic character of the estimation equation. One of the major conclusions of this chapter is, that the EU ETS was only responsible for a minor part of emission abatement whilst the economic downturn accounted for the lion’s share which led to the built-up of an excess of emission allowances in the market and hampered policy stringency under the EU ETS.

In the second study “Policy Stringency under the European Union Emission Trading System and its Impact on Technological Change in the Energy Sector”, therefore, I am interested to analysis how this negative evolution, on the one side, and an increase of stringency, on the other, affects innovative activity. For this reason, I relate two measures for policy stringency, namely the certificate oversupply in the market and the transition from phase I to phase II under the EU ETS, to “green” technological change approximated by climate change mitigation technology (CCMT) patent counts. Thereby, I am interested to measure the effects of these two different but not mutually exclusive impacts on the estimated number of patents in my data sample. For this empirical exercise, I make use of a panel negative binomial estimator due to the distributional characteristics of the patent data in my data frame. The main results for this study is, that policy stringency matters in order to spur technological change. Thereby, greater stringency measured in the transition from phase I to phase II is related to an increase in the predicted number of patents. On the other side, decreasing stringency, measured by the excess supply of certificates in the market, is related to a decrease in the predicted number of patents.

In the last work “Climate Change Mitigation and the Role of Technologic Change: Impact on selected headline targets of Europe’s 2020 climate and energy package” an impact assessment of these CCMTs is performed with respect to different policy goal measures of Europe’s 2020 climate and energy package. Thereby, I relate CCMT patents for energy generation and distribution to the goal of a 20% share of renewables in gross final energy consumption and well CCMTs to total final energy consumption and to final energy consumption in the transport sector, respectively, to the goal of a 20% increase in energy efficiency. As a regression method, a panel fixed effects approach is chosen. Thereby, the main observation is, that these technologies can make a different if goals are reached or not and, that penetration for final users differs among goals and sectors.

In the last chapter, a summary of the obtained results is presented and the respective policy implications for the EU ETS and the development and deployment of CCMTs.