Environmental policy and invention crowding out. Unlocking the automotive industry from fossil fuel path dependence

This paper aims to shed light on the drivers that encourage a shift from incumbent internal combustion engine technologies towards low-emission vehicle technologies. We emphasise the role of fuel prices, one of the main drivers of environmental innovation, and other features of the technology space (such as technological proximity), in impacting technological dynamics and fossil fuel technological lock-ins. Specifically, we investigate whether green technological efforts come at the expense of other environmental or non-environmental inventive activities. In doing so, we employ Self-Organised Maps (SOMs) to detect the main technological domains exploited by the automotive industry during the period 1982-2008, using triadic patent families as a proxy for technological efforts pursued in each technological field. On the one hand, we test whether these drivers foster the substitution of non-green patents with green ones. On the other, we analyse if they favour substitution between technological efforts related to alternative vehicles, de facto influencing low-emitting vehicle competition. Our findings suggest that higher tax-inclusive fuel prices (used as a proxy for carbon tax) are effective in redirecting patenting activities from non-green to green technological fields. In addition, we observe a similar impact when we focus on green technological fields. Although this result may involve the risk of potential lock-in into sub-optimal substituting technologies, there are insights that the competition within the environmental technological domain mainly regards technological efforts spent on greening conventional cars and developing low-emission vehicles.