Green Innovation and Diffusion: Policies to Accelerate Them and Expected Impact on Macroeconomic and Firm-Level Performance
Staff Discussion Notes, November 6, 2023
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- Green Innovation and Diffusion: Policies to Accelerate Them and Expected Impact on Macroeconomic and Firm-Level Performance
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Bibliographic details
- Authors: Zeina Hasna, Florence Jaumotte, Jaden Kim, Samuel Pienknagura, Gregor Schwerhoff
- Published: November 6, 2023
- Series: Staff Discussion Notes
- DOI: https://doi.org/10.5089/9798400256950.006
Summary findings
- Innovation in low-carbon technologies (LCTs) has slowed in recent years.
- A global climate policy strategy can bolster innovation in, and deployment of, LCTs.
- Countries that expand their climate policy portfolio exhibit higher:
- (1) climate-change-mitigation-patent filings,
- (2) LCT trade flows, and
- (3) “green” foreign direct investment flows.
- Boosting innovation in, and deployment of, LCTs yields medium-term growth, which mitigates potential costs from climate policies.
- Evidence highlights the importance of international policy coordination and cooperation by showcasing potential climate policy spillovers.
Evidence and empirical measures
- Outcomes associated with expanded climate policy portfolios:
- Increased climate-change-mitigation-patent filings.
- Increased LCT trade flows.
- Increased “green” foreign direct investment flows.
- The note emphasizes measurable links between policy expansion and both innovation (patents) and diffusion (trade and FDI).
Macroeconomic and firm-level impacts
- Medium-term growth gains from boosting LCT innovation and deployment can offset the potential short-term costs of climate policies.
- The analysis connects firm-level innovation outcomes (patents, FDI) to broader macroeconomic performance (growth implications).
Policy implications and recommendations
- Expand climate policy portfolios to stimulate both innovation and deployment of LCTs.
- Prioritize international policy coordination and cooperation to capture spillover benefits across countries.
- Design climate policies recognizing their dual role in:
- Directly reducing emissions, and
- Stimulating innovation, trade, and green FDI that support medium-term economic growth.
Publication and metadata
- Authors: Zeina Hasna, Florence Jaumotte, Jaden Kim, Samuel Pienknagura, Gregor Schwerhoff
- Date: November 6, 2023
- Pages: 31
- Series: Staff Discussion Notes No. 2023/008
- Issue: 008
- Volume: 2023
- DOI: https://doi.org/10.5089/9798400256950.006
- Stock No: SDNEA2023008
- ISBN: 9798400256950
- ISSN: 2617-6750
Source: Staff Discussion Note 2023, 008, "Green Innovation and Diffusion: Policies to Accelerate Them and Expected Impact on Macroeconomic and Firm-Level Performance", November 6, 2023 (DOI: https://doi.org/10.5089/9798400256950.006).
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- Staff Discussion Note
- Staff Discussion Note