Innovation in environmental technology can play an important role in sustainable development. In this paper, the effects of quality of education and quality of political institutions on environmental innovation have been analyzed. The data that we have used are from the granted patents of 58 countries in 2013; and negative binomial models are used to analyze the data. The results indicate that the quality of education has a positive and significant relationship with innovation in environmental technology; but no significant effect for the quality of political institutions is found. Government expenditures on research and development on environment has also a positive and significant relationship with innovation in environmental technology, indicating that increase in such expenditures can increase environmental innovation. The results for the quality of political institutions could reflect market failure for environmental technology. Accordingly, government policies aimed for development of these technologies could provide a solution to this problem.
