Effectiveness of Environmentally Related Taxation on Innovation (Taxation, Innovation and the Environment)

This chapter analyses the effectiveness of environmentally related taxation to bring about innovation. It begins by discussing the challenges to measure innovation empirically and outlines potential metrics. The chapter then delves into a number of case studies to look for potential linkages, finding mixed evidence. It highlights the different types of innovation that environmentally related taxation does (and does not) induce. Constraints to the effectiveness of taxation to induce innovation are also investigated.
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