Do climate policies affect green patenting patterns?

This paper investigates the effect of Climate Change Policies (CCPs) on green innovation, for a sample of 40 advanced and emerging market economies, and five economic sectors, during the period 2000–2021. Our results suggest that CCPs positively affect the production of green patents, with the effect intensifying gradually over time. The effect is larger for non-market-based and technology support policies—such as emission limits, feed-in tariffs and R&D subsidies—in countries with greater competitiveness and during periods of stronger economic activity—that is, higher GDP growth, lower uncertainty and financial stress. The results based on a difference-in-differences approach suggest that the positive effect of stricter CCPs on green innovation is stronger in sectors with limited financial constraints. • Climate Change Policies (CCPs) foster green innovation. • The effect is larger for non-market-based and technology-support climate policies, such as R&D subsidies. • The impact is amplified in periods of strong economic activity and in sectors with limited financial constraints.