Download files
Abstract
This thesis contains three essays exploring demographic and technological challenges to environmental sustainability. Chapter 1 theoretically and empirically investigates the impact on government environmental expenditure of the divergent policy preferences of young and old generations, taking into account two distinct though interrelated aspects of population ageing: increased longevity and a rise in the proportion of individuals aged over 65 years. An implication of the overlapping generations model presented in this chapter is that a heightened preference for environmental care expenditure among the young dominates the preference of the older generation for higher transfer payments and lower environmental expenditure. To test this theoretical result, I employ a panel data set containing observations on a diverse set of 47 countries. Empirical results provide clear support for the theoretical hypothesis that the proportion of individuals over the age of 65 negatively impacts public spending on the environment, though this effect is overwhelmed by the statistically significant positive effect on environmental expenditure of both longevity and the proportion of the population aged between 15 and 64 years.
Chapters 2 and 3 utilise an OECD survey of over 4000 manufacturing facilities to focus on technological facets of environmental sustainability. Chapter 2 investigates the drivers of environmental R&D at the facility level and whether investments in R&D at the industry level are complementary to facility specific investments in green R&D. Broad-based industry R&D intensity and facility R&D intensity are shown to mutually reinforce one another, positively and significantly impacting the proportion of R&D expenditure that a facility devotes to environmental R&D. This is suggestive of positive technology spillovers at the facility level. Chapter 3 explores whether environmental R&D expenditure enhances facility profitability and whether the profitability enhancing effect of environmental R&D is attributable to green innovation. Key among the empirical results is that the proportion of R&D expenditure that a facility devotes to environmental R&D positively and significantly impacts facility profitability. Intriguingly however, this result is not driven by contemporaneous environmental innovation. Rather, it may be that by enhancing the green credentials of a facility, environmental R&D serves to elicit preferential treatment from key stakeholders.