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Cover IMF Working Papers
Environmental Policies and Innovation in Renewable Energy
Luca Bettarelli, Davide Furceri, Pietro Pizzuto, and Nadia Shakoor
This paper investigates the effect of Climate Change Policies (CCPs) on green innovation, for a sample of 40 advanced and emerging market economies and 5 economic sectors, during the period 2000-2021. Our results suggest that CCPs increase green patents, with the effect increasing gradually over time. The effect is larger for non-market-based policies—such as R&D subsidies—and technology-support instruments, 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.
Keywords:
green patents; climate change policy; diff-in-diff approach; innovation; effect of Climate Change Policies; CCPS increase; innovation in renewable energy; technology-support instrument; technology-support policy; Environmental policy; Renewable energy; Climate policy; Competition; Climate change; Global
Cover Finance & Development
Kaleidoscope A global view, in brief
International Monetary Fund. Communications Department

IN AN ARTICLE IN Foreign Affairs, IMF Managing Director Kristalina Georgieva issues a stark warning about the decline of international cooperation. A series of shocks have exposed the fragility of the global economy. Yet, at a time when cooperation is critical, the world is witnessing increasing fragmentation, which could end with nations breaking into rival economic blocs. In a shock-prone world, economies need to become more resilient—individually and collectively. The international community should pursue targeted progress where common ground exists and maintain collaboration in areas where inaction would be devastating. It will be crucial to shore up the global financial safety net and ensure international institutions such as the IMF are adequately resourced.

Keywords:
middle-income country; central bank action; country's electricity; wealth of nation; Renewable energy; Global; Middle East; Eastern Europe; Africa
Cover Finance & Development
North Africa’s Hydrogen Mirage
Mr. Rabah Arezki

DIGITALGLOBE VIA GETTY IMAGES

Keywords:
state-administered economy; crony private sector; Mediterranean pipeline; Southern Rim keep; EU's hydrogen; Renewable energy; Non-renewable resources; Greenhouse gas emissions; North Africa; Europe; Northern Europe