This study examines how national electricity market structures condition the impact of carbon pricing on green innovation within the European Union. Using two-way fixed-effects panel models, we uncover a central paradox: although liberalized, price-signal markets exhibit the highest baseline levels of green innovation, the marginal effect of carbon pricing in these markets is weakest and often negative. This pattern points to an innovation-substitution effect, whereby market flexibility facilitates short-term compliance strategies, such as fuel switching, that crowd out investment in fundamental research and development (R instead, it must combine carbon pricing with tailored market design and direct support for long-term R&D to coherently advance the sustainability transition.
Wang et al. (Mon,) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: