Green Innovation and Diffusion

Zeina Hasna is visiting from the International Monetary Fund and has kindly agreed to present her joint work on green innovation. The report draws on a few background working papers analyzing the economic impact of green innovation at the macro-and micro-levels, and the role of environmental policies in boosting green innovation and diffusion.

All welcome!


Abstract:
Innovation in low-carbon technologies (LCTs), which is essential in the fight against climate change, has slowed in recent years. This Staff Discussion Note shows that 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. Importantly, boosting innovation in, and deployment of, LCTs yields medium-term growth, which mitigates potential costs from climate policies. This note stresses the importance of international policy coordination and cooperation by showcasing evidence of potential climate policy spillovers.

The Staff Discussion Note is available from here: https://www.imf.org/en/Publications/Staff-Discussion-Notes/Issues/2023/11/03/Green-Innovation-and-Diffusion-Policies-to-Accelerate-the-Process-and-Expected-Impact-on-540134.