Essays on the Economics of Technological Change and the Environment

Technological change bears the promise of addressing environmental problems without reneging on economic development. However, taping its full potential requires an understanding of its drivers and barriers. The three chapters of this dissertation are a modest attempt at casting light on some of the factors that can foster technological change towards more environmental-friendly technologies. In Chapter One, I provide the first quantitative evidence that the Montreal Protocol, and its following amendments to protect the ozone layer, triggered a large increase in research and innovation on alternatives to ozone-depleting molecules. To do this, I use the full text of patents and scientific articles and implement a difference-in-differences strategy and a synthetic control method. To compare molecules’ chemical and industrial characteristics, I construct descriptive variables by applying machine learning techniques to the documents’ text. In Chapter Two, I investigate barriers to adopting solar lanterns in the context of rural Indian households. I design and implement a randomized controlled trial on people’s willingness to pay for such lanterns, and find that, despite the relative simplicity of the product, information barriers to adopting solar lanterns remain high. Chapter Three theoretically investigates firm-level barriers to green technological change. I outline a mechanism that explains why coordination at the industry level might be necessary. I argue that radical innovations (such as electric cars) require complementary innovations in interdependent components, and show that, when technological change requires investment by both suppliers and producers, coordination within an industry is needed and can be difficult to obtain.