Improving the Energy-Efficiency of Buildings: The Impact of Environmental Policy on Technological Innovation

Abstract

SummaryThis paper investigates the impact of alternative environmental policy instruments on technological innovations aiming to improve energy-efficiency in buildings. The empirical analysis focuses on three main types of policy instruments, namely regulatory energy standards in buildings codes, energy taxes as captured by energy prices and specific governmental energy R&D expenditures. Technological innovation is measured using patent counts for specific technologies related to energy-efficiency in buildings (e.g. insulation, high-efficiency boilers, energy-saving lightings). The estimates for seven European countries over the 1989-2004 period imply that a strengthening of 10% of the minimum insulation standards for walls would increase the likelihood to file additional patents by about 3%. In contrast, energy prices have no significant effect on the likelihood to patent. Governmental energy R&D support has a small positive significant effect on patenting activities. Keywords AbstractThis paper investigates the impact of alternative environmental policy instruments on technological innovations aiming to improve energy-efficiency in buildings. The empirical analysis focuses on three main types of policy instruments, namely regulatory energy standards in buildings codes, energy taxes as captured by energy prices and specific governmental energy R&D expenditures. Technological innovation is measured using patent counts for specific technologies related to energy-efficiency in buildings (e.g. insulation, high-efficiency boilers, energy-saving lightings). The estimates for seven European countries over the 1989-2004 period imply that a strengthening of 10% of the minimum insulation standards for walls would increase the likelihood to file additional patents by about 3%. In contrast, energy prices have no significant effect on the likelihood to patent. Governmental energy R&D support has a small positive significant effect on patenting activities.

The impact of environmental policy instruments on innovation: A review of energy and automotive industry studies

“…Similar patenting trends have been observed in other European countries, conditioned by the level of stringency of the standards (Noailly, 2012).…”

“…One example is the construction sector where owners of multi-tenant houses seldom are the actual endusers and do not carry the cost of use, e.g. the penalty of poor insulation (Noailly, 2012).…”

Innovation, Diffusion, Growth and the Environment: Taking Stock and Charting New Directions

“…Sizeable progress has been made in identifying relevant classification codes and a large set of technologies has now been identified, ranging from electricity generation, pollution control, transportation, buildings, and some adaptation technologies (Dechezlepretre et al 2011;Popp 2002;Johnstone et al 2010;Noailly 2012;Conway et al 2015). Accessing and searching patent databases has become easier over the years, as new methodologies now cover the entire population of patents and researchers have become familiar with the limits and advantages of working with patent data (Hascic and Migotto 2015).…”

Technology Invention and Diffusion in Residential Energy Consumption. A Stochastic Frontier Approach

“…Besides the positive impact of these latter, further stimuli to innovate derived from by the variability of energy prices via induced innovation hypothesis as well as from the technological opportunity, measured by country-specific knowledge absorptive capacity. The determinants of new EE technologies in the building sector is also investigated by Noailly (2012), who tests the impact of alternative environmental policy instruments (regulatory energy standards in building codes, energy prices and specific governmental energy R&D expenditures) on EE patent applications in eight technological building sectors as a proxy for firms' innovative effort. The panel covers seven European countries over the period 1989-2004 and finds that regulatory standards have a greater impact than energy prices and R&D support on innovation.…”