When Strengthening Environmental Regulation Reduces Green Innovation: Theory and Evidence from the Auto Industry

Matthieu Glachant, CERNA, MINES ParisTech

It is commonly believed that strengthening environmental standards increases green innovation. We develop a model and produce empirical evidence which partly disconfirm this view. The model pre- dicts that regulatory change has opposite impacts on innovation when the country is a regulatory leader or a country adopting a standard previously introduced elsewhere. The analysis of panel data from the auto industry from 1992 to 2007 confirms these predictions. We find that regulatory leadership increases innovation whereas innovation falls when the country is a regulatory follower.

About the speaker
Matthieu Glachant is head of CERNA – Centre for industrial economics and a professor of economics at MINES ParisTech. He is also a Visiting Professor at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics since 2012. Matthieu holds a PhD in economics from the Ecole des mines in Paris. Before joining MINES ParisTech in 2001, he was Jean Monnet Fellow at the European University Institute. His research is in the fields of environmental economics and energy economics. Specific areas of expertise include the economics of green innovation, renewable energy, the economics of Corporate Social Responsibility, waste policies, and climate change issues. He is an associate editor of the journal Resource and Energy Economics.

Venue: Room H0.06 (SBE, Tongersestraat 53)

Date: 24 February 2016

Time: 12:00 - 12:00  CET