The Relationship Between Environmental Technology Patenting and Environmental Performance Index in Countries: What Does It Mean and How Can We Measure It

Abstract

National governments need to make informed decisions to ensure sustainable development and the use of new technologies. Thus, two major problems emerge: how to evaluate governments’ success in encouraging companies to invest in environmental technologies, and how to measure the efficiency of technology diffusion in terms of environmental well-being. The knowledge about the relationship between environmental performance and environmental technologies at the country level enables decision-makers in the field of sustainable development to more rationally plan the costs of developing new technologies, as well as track the return on their implementation. As a result, society and industry will receive signals about the effectiveness of the implemented sustainable development policy. The main goal of the research was to overcome the gap in the field of environmental wellbeing: how to measure at the macro level the dependence of countries’ success in environmental performance on how developed they are in environmental technologies. The specific objective of the study was to quantify the relationship between the integral indicator of environmental well-being Environmental Performance Index (EPI) and innovative activity in the field of environmental technology at the cross-country level. To evaluate the development of environmental technologies, the platform solution Orbit Intelligence was used, specifically, the FamPat worldwide patent database. It was confirmed that the more developed the economy, the higher EPI and the level of development of environmental technology. At the same time, no relationship was found between the 10-year change in EPI and the 10-year change in the patent activity index. The hypothesis about the statistical significance of the relationship between the integral indicators of patent activity in the field of environmental technology and the current value of EPI was confirmed. A regression dependence was determined, which was well approximated by the linear regression of EPI on the logarithm of the country’s patent activity index in the field of environmental technology. The dependence can be interpreted as a slowdown in the growth of EPI when a certain level of patenting is reached. The novelty of the research lies in the fact that a framework has been proposed and implemented for assessing the relationship between environmental well-being and environmental technology. This framework can be used to study individual environmental problems in countries in more detail and to identify the level of available technologies for solving these problems.