As part of the series of the "Finance Research Seminar", VGSF welcomes Marcin Kacperczyk from Imperial College London to present his research paper.
The CO2 Question: Technical Progress and the Climate Crisis
Are companies gravitating towards green R&D and is corporate behavior, in particular carbon emissions, affected by green technical progress? Based on global patent filings and corporate financial reporting, we analyze corporate green and brown R&D activity and its effects in reducing carbon emissions. We find consistent evidence of limited green R&D by brown companies. Innovating companies with higher carbon emissions engage more in brown R&D and less in green R&D. Despite a steady rise in the share of green R&D, we find little evidence that green innovation reduces the future carbon emissions of 1) innovating firms, 2) non-innovating firms in the same sector, 3) firms in other sectors and, 4) across countries. Direct and indirect emissions are not significantly affected by green innovation across all sectors and around the world, whether in the short term (one year after filing a green patent) or in the medium term (three or five years after filing).