Innovation, carbon emissions and the pollution haven hypothesis: Climate capitalism and global re-interpretations

This article considers impacts from innovation, defined in terms of research and development expenditure, on carbon emissions. We relate our study to scholarship about the Environmental Kuznets Curve and the Pollution Haven Hypothesis, situating this analysis within literature about the compatibility of broadly capitalist systems and combating climate change. We thus incorporate scholarship surrounding themes such as climate capitalism and ecological modernization. There are three main research questions. First, what is the impact of increasing levels of innovation on emissions? Second, how does the level of economic development affect impacts from greater innovation on emissions? Third, does this analysis generate evidence to support the Pollution Haven Hypothesis? To test these questions, and three parallel hypotheses, we initially deployed a panel data model, based on World Bank data, incorporating control variables covering economic, spatial and environmental factors. We then split the country sample into two GDP-based cohorts to test for variations in effects related to economic development. Subsequently, a multi-input regional-output model was deployed to incorporate analysis of a pollution haven effect. Our analysis suggests that whilst greater innovation diminished carbon dioxide emissions for high-income countries, this effect could not be identified elsewhere. Furthermore, the multi-input regional-output model implied that explanations for these contrasting results might lie in a pollution haven effect. Overall, this study implied some acutely limited support for climate capitalism and ecological modernization, constructed on data from high-income countries alone.