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Abstract

In this dissertation, I study how environmental regulations impact incentives to innovate for competing clean and dirty technologies. I examine this under the framework of international environmental agreements, and I specially focus on the cases of the Montreal Protocol on Substances that Deplete the Ozone Layer and one of its amendments, the Kigali Amendment. In order to analyze the effect of environmental regulations on incentives to innovate, I focus on two dimensions that have received little attention in environmental innovation, namely the timing of technological change and the value of innovations, as measured by the value of patents. This dissertation is divided into two parts.

In the first part, I develop and adapt two new methods to study the impact of an environmental regulation on patent value. First, I develop a dynamic discrete choice model of patent renewal under uncertain environmental regulation. Together with a synthetic control group, this approach allows me to quantify the monetary impact of an environmental regulation on patent value. This new method allows me to estimate the technological gains and losses engendered by an environmental regulation. Second, I adapt the nonparametric model of van den Bergh et al. (2020) to study the impact of an environmental regulation on patent renewal, a proxy for patent value. I examine this impact in the context of the Kigali Amendment to the Montreal Protocol. This method allows me to estimate the average treatment effects on conditional survival probabilities of clean and dirty patents around the signature of the agreement. This new approach to the analysis of patent renewal rates enables me to explore the impact of an international environmental agreement on technological change and on the timing of technological change.

In the second part, I apply the methods that I developed and adapted in the first part. First, I quantify the technological gains and losses induced by the Kigali Amendment to the Montreal Protocol. This permits me to further shed light on the technological incentives that countries face as they ratify international environmental agreements. Second, I apply the nonparametric model that I adapted to patent data in the first part to scrutinize the impact of the Montreal Protocol on Substances that Deplete the Ozone Layer and its early amendments on the value of clean and dirty technologies, proxied by patent renewals. This enables me to shed further light on the various hypotheses regarding the original drivers of the Protocol.