Patent Systems and Carbon Dioxide Emissions: Short and Long Run Perspectives on Economic Development and Sustainability

Abstract

This study explores the relationship between patent system strength and carbon dioxide (CO2) emissions across 46 developed and developing countries from 1998 to 2017 using Fixed Effects (FE) and Autoregressive Distributed Lag (ARDL) models. The findings reveal that stronger patent regimes in developed countries are initially associated with higher emissions, suggesting that innovation may first drive industrial growth before transitioning to cleaner technologies. In developing economies, this effect is weaker, likely due to potentially lower innovation capacity and dependence on imported technologies. The findings refine the Environmental Kuznets Curve (EKC) hypothesis by illustrating how IPRs can shape its trajectory. Additional factors—such as renewable energy use, which consistently reduces emissions, trade openness and urbanization, which yield mixed and positive effects, respectively—highlight the complexity of the emissions-patent nexus. We conclude that patent strength alone cannot deliver emissions reductions; complementary policies such as renewable energy support, carbon pricing, and technology sharing are essential to align innovation systems with climate goals.