Climate change and knowledge spillovers for cleaner production: New insights

Abstract

This paper explored the extent to which the climate change could affect economic performance for large enterprises in the world through the process of knowledge diffusion in the energy sector. There is a theoretical dichotomy between studies to understand if and how economies react to climate change both at macro and micro level. The economic analysis of climate change effects is important to demonstrate that production is associated to world climate and to implement an opportune framework for modelling the economic damages. In this way, new sustainable strategies for increasing efficiency in the use of energy can be suggested by policy makers. Because of environmental externalities produced by the economic activities of companies, the analysis of technological diffusion processes play a crucial role in analysing the economic impact of the climate change. In this perspective, this paper intends to fill two gaps in the literature: firstly, it sheds more light on the sensitivity of the economic performance of companies to climate change; secondly, it analyses the role of knowledge spillovers in a relevant field of cleaner production, which is that of energy. Indeed, the empirical evidence concerning the climate change effects in energy technology through knowledge spillovers is yet poor. The econometric analysis considered a sector-based panel dataset for the USA, Japan and the following European countries: France, Belgium, Germany, Sweden, Italy, the Netherlands, the United Kingdom, Finland and Denmark, over the time span 2002–2014. The results showed a significant impact of climate change on firms’ productivity and the spillovers play an important role in this process. The findings should have relevant policy implications for each country government in case of development of industrial strategy instruments in cleaner production technology.