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Green innovation and income inequality: A complex system analysis
Lorenzo Napolitano1, Angelica Sbardella2,3, Davide Consoli4
1European Commission Joint Research Centre (JRC-Seville), Seville, Spain.
Structural Change and Economic Dynamics
|December 15, 2022
Summary
Income inequality hinders green technology innovation. Higher inequality reduces a country's capacity for developing complex environmental technologies, with non-linear effects observed.
Area of Science:
- Environmental economics
- Innovation studies
- Economic complexity
Background:
- Rising global environmental challenges necessitate technological solutions.
- Understanding the socio-economic drivers of environmental innovation is crucial.
- Income inequality is a persistent global issue with potential economic repercussions.
Purpose of the Study:
- To investigate the relationship between income inequality and environmental innovation.
- To quantify the impact of inequality on green inventive capacity.
- To explore potential non-linear dynamics in this relationship.
Main Methods:
- Utilized the Economic Fitness and Complexity (EFC) algorithm.
- Calculated a green inventive capacity index.
- Employed non-parametric methods for empirical analysis.
- Analyzed a panel of 57 countries from 1970-2010.
Main Results:
- Income inequality negatively impacts the capacity for environmental innovation.
- Higher levels of inequality are associated with reduced development of green technologies.
- Non-linear relationships between inequality and innovation were identified.
Conclusions:
- Policies addressing income inequality may foster environmental technological advancement.
- The findings suggest a complex interplay between socio-economic factors and green innovation.
- Further research into non-linear dynamics is warranted for nuanced policy-making.
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