Do Investments in Clean Technologies Reduce Production Costs? Insights from the Literature

Abstract

The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

Understanding the Linkages Between Financial Markets and Sustainable Economic Development

“…Given this circumvention of environmental regulation and the finding of an inverse relationship between environmental pollution and the intensity of government regulations, most informal economic activities intensify environmental degradation (Brown et al, 2014). Moreover, informal manufacturing sectors are usually made up of small-scale firms that lack the capital base for investment in clean or energy-efficient technologies (e.g., Timilsana and Malla, 2021). But depending on the linkages between formal and informal enterprises, the circumvention of environmental regulation may sometimes be intentional, perhaps even enabled by the authorities, with formal enterprises outsourcing environmentally burdensome activities to informal enterprises to cut production costs and, in some cases, maintain international competitiveness.…”

Effects of Increased Renewable Energy Consumption on Electricity Prices: Evidence for Six South American Countries

“…Finally, Timilsina and Malla [28] analyze through an extensive review of existing empirical literature if investments in clean technologies cause an increase in productivity. Their results are mixed and inconclusive.…”

“…In general, related research deals with energy prices and their relationship with economic growth or energy consumption [6][7][8][9][10][11]. Studies that specifically address the issue of the influence of renewable energies on electricity prices include: Jensen and Skytte [12], Amundsen et al [13], Fischer [14], De Miera et al [15], Gelabert et al [16], Woo et al [17], Gerardi and Nidras [18], Labandeira and Linares [19], Würzburg et al [20], Ketterer [21], Clò et al [22], Dillig et al [23], Rintamäki et al [24], Csereklyei et al [25], Kolb et al [26], Abrell and Kosch [27], Timilsina and Malla [28]. The contributions of these studies will be presented in the literature review section.…”

Commodities and Development Report

“…Given this circumvention of environmental regulation and the finding of an inverse relationship between environmental pollution and the intensity of government regulations, most informal economic activities intensify environmental degradation (Brown et al, 2014). Moreover, informal manufacturing sectors are usually made up of small-scale firms that lack the capital base for investment in clean or energy-efficient technologies (e.g., Timilsana and Malla, 2021). But depending on the linkages between formal and informal enterprises, the circumvention of environmental regulation may sometimes be intentional, perhaps even enabled by the authorities, with formal enterprises outsourcing environmentally burdensome activities to informal enterprises to cut production costs and, in some cases, maintain international competitiveness.…”