Knowledge spillovers from clean and dirty technologies: a patent citation analysis

<em>This report is co-authored by <a href="http://simpatic.eu/author/antoine-dechezlepretre/" target="_blank">Antoine Dechezleprêtre</a>, Grantham Research Institute on Climate Change and the Environment, London School of Economics; and  Myra Mohnen, University College London.</em> How much should governments subsidize the development of new clean technologies? We use patent citation data to investigate the relative intensity of knowledge spillovers in clean and dirty technologies in four technological fields: energy production, automobiles, fuel and lighting. We find that clean patents receive on average 43% more citations than dirty patents. We also look at indirect spillovers using Google’s Page Rank applied to patent data. This suggests that clean patents are also cited by more prominent patents. These results hold for all four technological areas. Two factors are shown to explain the clean superiority: clean technologies have more general applications, and they are radically new compared to more incremental dirty innovation. Knowledge spillovers from clean technologies are comparable in scale to those observed in the IT sector. Our results mean that stronger public support for clean R&D is warranted. They also suggest that green policies might be able to boost economic growth.