Volume 10, Issue 28, July - December, 2024

Impact of carbon pricing policies on economic growth and green innovation: A global analysis

Kossivi Fabrice Dossa^1,2,3♦, Yann Emmanuel Miassi^1,2

¹Faculty of Forestry, Geography and Geomatics, Laval University, Quebec, QC G1V 0A6, Canada
²Action-Research for Sustainable Development NGO, Department of Research Project, Cotonou 03296, Benin
³Faculty of Agriculture, Department of Agricultural Economics, University of Nigeria, Nsukka 041006, Nigeria

^♦Corresponding author
Faculty of Forestry, Geography and Geomatics, Laval University, Quebec, QC G1V 0A6, Canada, Action-Research for Sustainable Development NGO, Department of Research Project, Cotonou 03296, Benin, Faculty of Agriculture, Department of Agricultural Economics, University of Nigeria, Nsukka 041006, Nigeria

ABSTRACT

This study conducts a systematic literature review to comprehensively analyze the impact of carbon pricing policies on economic growth and green innovation, with a focusing on selected countries. We tapped into Google Scholar and related sources to identify studies in this area on carbon pricing, economic growth, and green innovation among eight developing countries: Argentina, Brazil, China, India, Mexico, Indonesia, Colombia, and South Africa. The outlined survey aims to bridge existing knowledge gaps in emerging economies. Our analysis shows that some of the developing nations mentioned are implementing environmental fiscal reforms to reduce greenhouse gas emissions, while others maintain distorting subsidies. Notably, the safeguards of carbon prices can help businesses transition towards sustainability as well as encourage innovative activities that enchance competitiveness. Contrary to popular belief, carbon pricing in developing countries does not necessarily have a regressive effect at the household level, especially in rural areas with diverse energy use patterns. In addition, employment rate and GDP indicate different overall dynamics over time when undergoing structural change towards decarbonization processes by nation economies. In other words, a welltargeted set of socioeconomic-specific carbon price rules might result in many advantages, such as increased economic growth fairness and progress toward sustainable development goals. This study underscores the importance of designing complex carbon pricing strategies for transitioning to a low-carbon future in developing countries.

Keywords: Carbon price, economic development, green innovation, specific nations, sustainability

Climate Change, 2024, 10(28), e5cc1031

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DOI: https://doi.org/10.54905/disssi.v10i28.e5cc1031

Published: 03 July 2024