Patent strength, innovation, and CO2 emissions: evidence of non‐linear environmental impacts across economies

Abstract

This study investigates the complex relationship among patent strength, innovation, and CO2 emissions by exploring a pathway through which the strength of patents influences environmental sustainability. Utilizing structural equation modeling (SEM), we examine data from a diverse set of OECD and non‐OECD countries over the period 1998–2017. Our results reveal a non‐linear, S‐shaped relationship between patent stringency and CO2 emissions, highlighting that while stronger patent protections can initially lead to increased emissions due to industrial activity, they may also encourage efficiency improvements and cleaner practices after reaching a certain threshold. However, excessively stringent patents may revive emissions by reducing competition and innovation. The findings emphasize the need for nuanced patent policies that consider both economic growth and environmental sustainability.