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## Appendix

In the following, we provide additional information on patent data and their
potential use for analysing climate change mitigation and adaptation
technologies.

As mentioned in the paper, the two main data sources on countries’ patenting
activity are PATSTAT and REGPAT, on which we offer additional details in the
following, especially aimed at a comparison between these two data sources.

In fact, as can be appreciated in Figure 2, PATSTAT and REGPAT present
significant differences in their temporal and geographical coverage. The large
difference in the number of documents is due to the fact that REGPAT records
patents filed only at the EPO, while PATSTAT collects information from most
patent offices worldwide. This makes REGPAT less suitable for the analysis of,
for instance, smaller countries. However, the EPO tends to receive high-
quality applications, making data collected from it more reliable.

While REGPAT is published annually by the OECD and covers the subset of
PATSTAT patent applications filed only at the EPO since its inception in 1978,
PATSTAT has been published biannually by the European Patent Office (EPO)
since 2007 and has grown substantially in coverage over time. As of the latest
editions, it records information on more than 100 million patent applications
filed since the late eighteenth century, which are collected in over 50
million families. Whenever the information is available for a patent
application, PATSTAT records, among other things, the receiving patent office,
the filing date, the technologies in which the patent innovates (encoded in
standard technology codes), and the residence of the applicants and of the
inventors at the time of filing. The geographical information is incomplete,
with the coverage varying widely across patent offices. The most commonly
available information in this sense is the country of residence of inventors
and applicants.

Figure 2: Comparison of the coverage of PATSTAT (blue) and REGPAT (orange).
Main plot: time series of the number of patent applications recorded in
PATSTAT and REGPAT over the period covered by both databases (1978-2022).
Inset: time series of the number of patent applications recorded in PATSTAT
over the entire period it covers.

Since, for geographical reasons, the EPO attracts disproportionately more
European patent applications, it does not provide a uniform geographical
coverage beyond European borders. Furthermore, filing costs at the EPO are
higher than in most national offices. This skews the sample towards “high-
value” patents and, indirectly, leads to an over-representation of richer
European countries. However, REGPAT makes up for this shortcoming thanks to an
accurate geocoding across over 5500 sub-national regions of the patent
documents filed by applicants or inventors residing in one of over 40
countries belonging to the OECD, the EU, the UK, Brazil, China, India, the
Russian Federation, and South Africa.171717The brochure of an older version of
REGPAT, available at http://econ.geo.uu.nl/crespo/tech_div/regpat_201602.pdf,
provides more details on the structure of the geographical coverage

Concerning the temporal coverage, Figure 2 shows that REGPAT and PATSTAT
differ substantially. However, it also suggests that both databases cover a
long enough time window for all practical purposes. The coverage of REGPAT
starts only in 1978, while PATSTAT records US and UK patents dating back as
far as the late eighteenth century. Nevertheless, large numbers of patents
have been recorded only in recent decades. Moreover, both databases are
updated to virtually the same date.

It is worth noting that, due to the dynamics of patent offices and the
regulations governing patent filing, there is an intrinsic lag of 12-18 months
between when an application is received by a patent office and when the
corresponding record appears in the database, at the end of the so-called
search phase by the patent office. During the search phase, patent offices
conduct a primary assessment of the originality of the invention and inform
the applicants, who can decide to either withdraw the application thus keeping
it confidential, or pursue the grant of a patent and disclose their
application to the public. Therefore, patent counts extracted from an edition
of PATSTAT or REGPAT published in 2022 are not reliable beyond 2018 or 2019.

An invention can be submitted to different offices –- e.g. to cover different
geographical regions – by filing different applications at different points in
time. The first patent application filed to protect an invention is called the
priority application. Subsequent applications that are related to the same
invention name the same applications as priorities, allowing to group into the
same patent family (there are over 50 million patent families in PATSTAT).
Families are a useful way to group together documents referring to the same
innovation and are thus frequently used as the basic unit of observation in
empirical exercises.

As mentioned above, PATSTAT provides limited information about the
geographical location of inventors and applicants for many documents, even
though the database records patents filed by applicants and inventors located
in more than 200 countries. Instead, REGPAT offers much more detailed
information, albeit on a smaller set of countries, by associating patent
documents to the OECD Territorial Level (TL) (OECD, 2020) code of the region
of residence of applicants and inventors. For European countries the TL
follows the hierarchical structure of the 2013 edition of the Nomenclature of
Territorial Units for
Statistics181818https://ec.europa.eu/eurostat/web/gisco/geodata/reference-
data/administrative-units-statistical-units/nuts) (NUTS), developed by
Eurostat. Instead, in the US, progressively finer levels of the classification
identify states, economic areas and counties, that do not follow a nested
structure.

To attribute a geographical location to patents one can leverage the
inventors’ as well as the applicants’ residence information. The former is
often preferred as a proxy for the location of inventive capabilities because
it is assumed that inventors (who are always physical persons) tend to live
close to where they perform their duties. On the contrary, applicants (who are
in many cases companies) may choose to assign to the corporate headquarters a
patent that was developed in a subsidiary located in a different country or
region for business-related reasons.

Multiple inventors or applicants can be linked to the same patent application
or family. In such cases, one may choose between counting the patent
fractionally and counting patents in full, when it comes to assigning patents
to geographical areas. Full counting counts as a unit of every pair of patent
documents and territorial units hosting at least one inventor. As a
consequence of this double counting, the weight attributed to a patent (and
even more for a family) depends on the number of inventors. Instead, in
fractional counting, each patent (or each family) sums to 1, and each
territorial unit having an inventor gets a fractional weight inversely
proportional to the total number of inventors. There is some debate in the
literature concerning the best approach (Waltman, 2016). However, in economic
complexity applications, fractional counting is generally the preferred
approach.

###  .1 Identification of green technologies

However, searching for environment-related patent documents was not
straightforward at the beginning because a dedicated classification system for
sustainable technologies was not available. In fact, before 2011, no specific
branch of the IPC or of other technology classification systems covered
environment-related inventions.

A first step in this direction was the creation in 2011 of the Y02 class the
EPO, in cooperation with the United Nations Environmental Program (UNEP) and
the International Centre on Trade and Sustainable Development (ICTSD), to
complement the IPC classification System. From the beginning, the purpose of
the Y02 class was to tag CCMT patent documents by means of search strategies
and algorithms implemented by expert examiners and that can be re-run
periodically to update the classes (Veefkind et al., 2012). The Y02 scheme
initially covered only patent documents related to CCMTs in the energy sector
and was later extended also to other types of mitigation technologies. This
effort by the EPO constituted a major advancement for the study of green
innovation both from an academic and policy perspective, as it has allowed
also non-specialists to easily identify CCMTs.

In 2013, the European Patent Office and the United States Patent and Trademark
Office (USPTO) agreed to harmonize their patent classification practices and
developed the Cooperative Patent Classification (CPC). Since then, the CPC has
become increasingly popular as a classification standard and has been
complementing or substituting the IPC in a growing number of patent offices
worldwide. As illustrated in Table 1, two types of codes can be found in the
CPC classification: codes starting with the letters A to H – similar to IPC
codes and representing the traditional classification of technologies; and
codes starting with Y, which are used to tag cross-sectional technologies that
are already indexed somewhere else in the classification191919USPTO-CPC
Section Y.
https://www.uspto.gov/web/patents/classification/cpc/html/cpc-Y.html
Therefore, the Y classification scheme is used to tag patent documents that
are already classified or indexed somewhere else in the classification. In
addition to the Y02 class, the new subclass Y04S dedicated to smart grids was
integrated in the CPC section Y. As shown in Table 2, the Y02 class consists
of more than 1000 tags related to sustainable technologies organized in 9 sub-
classes.

With the aim of maximizing the informative content on eco-innovation present
both in the IPC and CPC classifications, in 2015 the OECD (Haščič and Migotto,
2015) developed Env-Tech, an expert-based catalogue of environment-related
technologies based on the IPC classification and lastly updated in 2016 (OECD,
2016), which can be used to tag green patent documents in PATSTAT or other
patent data-sets. Env-Tech identifies 94 environment-related technology areas
that group 4- to 16-digit IPC and CPC codes, building on the CPC Y02 class
whenever possible. The catalogue relies on a keyword search strategy
identifying patent documents that correspond to each "target environmental
technology field” (Haščič and Migotto, 2015, p.19) covering CCMTs but also
environmental management and water-related adaptation technologies (class 1
and 2). When it is not possible to identify single IPC/CPC classes that
portray alone the technological field of interest, it employs a combination of
different IPC/CPC patent classes, also at different aggregation levels.

While widening the object of analysis is undoubtedly commendable,
unfortunately, it makes the catalogue very vulnerable to patent document re-
classification. In fact, while the additional information may have been useful
for the researchers working with versions of PATSTAT prior or contemporaneous
to 2016, the year up to which Env-Tech is updated, using a combination of
different IPC and CPC codes may constitute a drawback when working with more
recent versions of PATSTAT. This is because the classification of the codes
comprising any technology – especially for finer-grained codes – changes over
time, possibly reclassifying past inventions into new codes. Furthermore,
being fixed in time, Env-Tech not only it suffers from the reclassification of
previous inventions, but it also fails to consider newer patent applications.
In fact, technology codes are revised at least once a year to take into
account new technical advances, as well as to improve the search for the prior
art that the patent officers use to establish the application’s degree of
innovation. Moreover, the Y04S subclass covering smart grids, which at the end
of 2016 comprised 54000 patent documents (Angelucci et al., 2018), is not
included in the Env-Tech catalogue. By contrast, the Y02/Y04S codes are part
of the CPC section Y and are therefore robust to changes in the CPC
classification, are more user-friendly and readily usable for the relevant
data can be directly extracted by PATSTAT with no need for intermediate steps.
Lastly, another limitation of Env-Tech is that, due to its limited
granularity, it does not allow very detailed studies, an obstacle for carrying
out economic complexity analyses that usually rely on very fine-grained
information.