Facilitating induced green innovation in Finland: An evaluation of the effectiveness of carbon pricing and subsidies.

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Volume Title
School of Business | Bachelor's thesis
Date
2024
Major/Subject
Mcode
Degree programme
Bachelor’s programme in Economics
Language
en
Pages
24+6
Series
Abstract
This thesis addresses climate change by discussing how policy interventions can foster green innovation in Finland. Moreover, this literature review will discuss the effectiveness of carbon pricing and subsidies to incentivize innovation. The findings suggest that the key in environmental policy is the dual externality structure of the market, with a negative externality from carbon emissions and a positive externality from innovation. Furthermore, the optimal policy portfolio to incentivize green innovation includes both carbon pricing and R&D subsidies, because the two externalities need to be addressed separately. More specifically, with R&D subsidies are dominant in the short-term and carbon pricing in the long-term. First, I will delve into the policies and their effectiveness on a global scale, after which the focus will be narrowed down to Finland.
Description
Thesis advisor
Murto, Pauli
Keywords
Green Innovation, Environmental Policy, Carbon Pricing, R&D Subsidies, Climate Change, Innovation Policy
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