Three Essays on Environmental Economics

• Author / Creator

  Asrafuzzaman,.

• In the era of globalization, countries are adopting different environmental policies
  to mitigate the adverse impact of climate change. A better understanding of how
  these policies shape firms’ decisions and impact innovation and the environment
  will help policymakers make informed decisions. The thesis aims to study firms’
  decisions regarding FDI and exports as countries introduce emission taxes and the
  link between innovation, environmental policy, and emissions.
  The first chapter theoretically studies the firms’ choice between FDI and export
  in a model with two countries, where each country has a single firm producing a
  polluting good that is subject to a per-unit emission tax. We consider a three-stage
  game theoretic model with both ex ante and ex post emission tax. In the case of ex
  ante emission tax, the government sets an emission tax, then firms decide between
  export and FDI and finally, firms choose their production level. In the ex-post case,
  firms choose between FDI and export first, and then the government decides its
  emission tax level, followed by the firm’s production decision.
  In the first case, when taxes are determined in the initial stage of the game, if
  the fixed cost of FDI is sufficiently high, both firms opt for exporting. However,
  if the fixed cost of FDI is sufficiently low, firms choose both FDI and exporting.
  For intermediate fixed costs, the decision between FDI and exporting depends on
  the level of emission taxes and tariffs. In the second case, with ex post emission
  taxes, anticipating that countries will set higher emission taxes if both firms engage
  in FDI, only one-way FDI from either country occurs in equilibrium.
  The rest of the thesis examines the relationship between innovation, environmental
  stringency, and emissions. In doing so, the second chapter provides a comprehensive
  review of the recent literature that uses patent data with a specific emphasis
  on recent trends. This chapter also introduces the concepts and datasets used in
  the following two empirical chapters that use patent data, particularly green patent
  data, as well as new measures of environmental stringency. Furthermore, the second
  chapter also explores recent trends in green patent applications and environmental
  stringency.
  The third and fourth chapters attempt to answer empirical questions using concepts
  introduced in the second chapter, using patent data from PATSTAT. In the
  third chapter, we investigate whether environmental policy stringency induces green
  innovation in OECD countries, the weak version of the Porter hypothesis. We use
  green patents to proxy innovation, while the newly introduced environmental stringency
  index proxies environmental stringency.
  Some of the main empirical findings are as follows. First, we do not find evidence
  of the weak version of the Porter hypothesis. Rather, our results suggest
  the presence of the technology lock-in hypothesis. Second, we find that cumulative
  knowledge of green technology significantly increases the likelihood of having more
  green innovation. This is consistent with the path dependence of green innovation
  and the importance of knowledge accumulation for future innovation.
  The fourth chapter studies whether green patents help reduce carbon dioxide
  (CO2) and other Greenhouse Gas (GHG) emissions. The main findings show that
  increasing the number of green patents is not associated with a reduction in CO2
  emissions. This could be due to the rebound effect, which is discussed in energy economics.
  The rebound effect occurs when the savings from improved energy efficiency
  are offset by changes in an individual’s behaviour.

• Subjects / Keywords

  • Green patent
  • innovation
  • emissions
  • location choice

• Graduation date

  Fall 2024

• Type of Item

  Thesis

• Degree

  Doctor of Philosophy

• DOI

  https://doi.org/10.7939/r3-shat-8c25

• License

  This thesis is made available by the University of Alberta Library with permission of the copyright owner solely for non-commercial purposes. This thesis, or any portion thereof, may not otherwise be copied or reproduced without the written consent of the copyright owner, except to the extent permitted by Canadian copyright law.