The study examines whether carbon pricing (carbon taxes and cap-and-trade) spurs climate innovation. The dynamic panel data analysis covering 38 countries in the Organisation for Economic Cooperation and Development (OECD) over 34 years finds that the adoption of carbon pricing policies is associated with an increase in patent applications for climate mitigation technologies of 3.1 per million population in the year of enactment, and 5.2 per million population in the long term. This finding holds controlling for other policies that can influence climate innovation, such as feed-in tariffs and public investment in low-carbon research and development (R&D). Further, the trade leakages do not undermine the association between carbon pricing and climate innovation.
You can read it here: https://doi.org/10.1016/j.jclepro.2023.136459