Some Micro‐Evidence on the “Porter Hypothesis” from Austrian VOC Emission Standards

Roediger-Schluga, Thomas

doi:10.1111/1468-2257.00223

Cited by 22 publications

(8 citation statements)

References 13 publications

(16 reference statements)

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“…Using macroeconomic data, Nemet and Kamen (2007) find little evidence of crowding out from federal energy R&D spending. However, in a survey of Austrian firms, Roediger-Schluga (2003) finds most firms cancelled or postponed other R&D projects in order to increase environmental R&D after passage of new volatile organic compound standards. 1 This paper addresses the crowding out issue directly, focusing on both the private and social opportunity costs of climate R&D. Here, the key question is whether increases in energy R&D are likely to represent new R&D spending, or whether some (or all) of the additional climate R&D comes at the expense of, or crowds out, other R&D. To address the social opportunity costs of climate R&D, we ask whether the social value of energy R&D differs from other types of innovation.…”

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confidence: 99%

Where Does Energy R&D Come From? Examining Crowding Out from Environmentally-Friendly R&D

Popp

Newell

2009

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Recent efforts to endogenize technological change in climate policy models demonstrate the importance of accounting for the opportunity cost of climate R&D investments. Because the social returns to R&D investments are typically higher than the social returns to other types of investment, any new climate mitigation R&D that comes at the expense of other R&D investment may dampen the overall gains from induced technological change. Unfortunately, there has been little empirical work to guide modelers as to the potential magnitude of such crowding out effects. This paper considers both the private and social opportunity costs of climate R&D. Addressing private costs, we ask whether an increase in climate R&D represents new R&D spending, or whether some (or all) of the additional climate R&D comes at the expense of other R&D. Addressing social costs, we use patent citations to compare the social value of alternative energy research to other types of R&D that may be crowded out. Beginning at the industry level, we find some evidence of crowding out in sectors active in energy R&D, but not in sectors that do not perform energy R&D. This suggests that funds for energy R&D do not come from other sectors, but may come from a redistribution of research funds in sectors that are likely to perform energy R&D. Given this, we proceed with a detailed look at climate R&D in two sectors-alternative energy and automotive manufacturing. Linking patent data and financial data by firm, we ask whether an increase in alternative energy patents leads to a decrease in other types of patenting activity. We find crowding out for alternative energy firms, but no evidence of crowding out for automotive firms. Finally, we use patent citation data to compare the social value of alternative energy patents to other patents by these firms. Alternative energy patents are cited more frequently, and by a wider range of other technologies, than other patents by these firms, suggesting that their social value is higher.

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confidence: 99%

Where Does Energy R&D Come From? Examining Crowding Out from Environmentally-Friendly R&D

Popp

Newell

2009

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“…Wossink and Wefering (2003) Summarizing, Ayres (1994) and Roediger-Schluga (2003) use firm level case studies as Porter and van der Linde do and find indeed 'some cases' as claimed by PL that have increases in competitiveness as perceived by firms. As PL had made a claim only on 'some cases' it should be clear that indeed they themselves found some cases for enhanced profitability, Roediger-Schluga (2003) found some cases of enhanced perceived competitiveness. Berman and Bui (2001) and Alpay et al (2002) found cases of enhanced productivity.…”

Section: Distance Functions Cum Regressionmentioning

confidence: 95%

The environmental Porter hypothesis: theory, evidence, and a model of timing of adoption

Kriechel

Ziesemer

2009

Economics of Innovation and New Technology

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The Porter Hypothesis postulates that the costs of compliance with environmental standards may be offset by adoption of innovations they trigger. We model this hypothesis using a game of timing of technology adoption. We show that times of adoption are earlier the higher the non-adoption tax. The environmental tax turns the preemption game with low profits into a game with credible precommitment yielding high profits (pro-Porter). If there is a precommitment game without environmental taxes, the introduction of a tax leads to lower profits (anti-Porter). An evaluation of the empirical literature indicates that the Porter hypothesis holds even for profit-maximizing firms under multiple market imperfections such as imperfect competititon, X-inefficiency, and agency costs. These are more likely to be present in sectors with large firms. In many case studies that we evaluate, though, we detect an element of explicit or implicit subsidies for environmentally friendly behaviour, which is in line with Pigovian policies. Keywords AbstractThe Porter Hypothesis postulates that the costs of compliance with environmental standards may be offset by adoption of innovations they trigger. We model this hypothesis using a game of timing of technology adoption. We show that times of adoption are earlier the higher the non-adoption tax. The environmental tax turns the preemption game with low profits into a game with credible precommitment yielding high profits (pro-Porter). If there is a precommitment game without environmental taxes, the introduction of a tax leads to lower profits (anti-Porter). An evaluation of the empirical literature indicates that the Porter hypothesis holds even for profit-maximizing firms under multiple market imperfections such as imperfect competititon, X-inefficiency, and agency costs. These are more likely to be present in sectors with large firms. In many case studies that we evaluate, though, we detect an element of explicit or implicit subsidies for environmentally friendly behaviour, which is in line with Pigovian policies.

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“…On a macro level, Nemet and Kammen (2007) find little evidence of crowding out from public energy R&D spending. However, on a firm level of Austria, Roediger-Schluga (2003) found that most firm's re-schedule R&D projects in order to increase environmental R&D after passage of new volatile organic compound standards.…”

Section: Crowding Out Effects From Public Randd Spendingmentioning

confidence: 99%

Crowding Out or Knowledge Spillovers from the Wind Power Industry: The Effect on Related Energy Machinery

Grafström

2018

SSRN Journal

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There is a risk that if a government adopts a R&D spending policy directed towards wind power technology crowding out of other technologies might occur due to fiscal constraints and changes in relative prices. The purpose of this paper is to provide a backward-looking analysis of how the accumulation of wind energy patents and public R&D spending affected the domestic and neighboring country output of granted patents in the "related energy machinery field". The econometric analysis, a Poisson fixed-effects estimator based on the Hausman, Hall and Griliches (1984) method, relies on a data set consisting of eight countries in Western Europe with the highest rates of patent production in the field of wind power between 1978 and 2008. The results show that an accumulation of a national wind power stock is a statistically significant negative determinant of a country's related energy machinery patenting outcomes. However, no crowding out effects of public R&D spending were found.

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Some Micro‐Evidence on the “Porter Hypothesis” from Austrian VOC Emission Standards

Cited by 22 publications

References 13 publications

Where Does Energy R&D Come From? Examining Crowding Out from Environmentally-Friendly R&D

Where Does Energy R&D Come From? Examining Crowding Out from Environmentally-Friendly R&D

The environmental Porter hypothesis: theory, evidence, and a model of timing of adoption

Crowding Out or Knowledge Spillovers from the Wind Power Industry: The Effect on Related Energy Machinery

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