Induced innovation in energy technologies and systems: a review of evidence and potential implications for CO2 mitigation

We conduct a systematic, interdisciplinary review of empirical literature assessing evidence on induced innovation in energy and related technologies. We explore links between demand-drivers (both market-wide and targeted); indicators of innovation (principally, patents); and outcomes (cost reduction, efficiency, and multi-sector/macro consequences). We build on existing reviews in different fields and assess over 200 papers containing original data analysis. Papers linking drivers to patents, and indicators of cumulative capacity to cost reductions (experience curves), dominate the literature. The former does not directly link patents to outcomes; the latter does not directly test for the causal impact of on cost reductions). Diverse other literatures provide additional evidence concerning the links between deployment, innovation activities, and outcomes. We derive three main conclusions. (1) Demand-pull forces enhance patenting; econometric studies find positive impacts in industry, electricity and transport sectors in all but a few specific cases. This applies to all drivers - general energy prices, carbon prices, and targeted interventions that build markets. (2) Technology costs decline with cumulative investment for almost every technology studied across all time periods, when controlled for other factors. Numerous lines of evidence point to dominant causality from at-scale deployment (prior to self-sustaining diffusion) to cost reduction in this relationship. (3) Overall Innovation is cumulative, multi-faceted, and self-reinforcing in its direction (path-dependent). We conclude with brief observations on implications for modeling and policy. In interpreting these results, we suggest distinguishing the economics of active deployment, from more passive diffusion processes, and draw the following implications. There is a role for policy diversity and experimentation, with evaluation of potential gains from innovation in the broadest sense. Consequently, endogenising innovation in large-scale models is important for deriving policy-relevant conclusions. Finally, seeking to relate quantitative economic evaluation to the qualitative socio-technical transitions literatures could be a fruitful area for future research

Do tax incentives increase firm innovation? an RD design for R&D, patents, and spillovers

We present evidence of the positive causal impacts of research and development (R&D) tax incentives on a firm’s own innovation and that of its technological neighbors (spillovers). Exploiting a change in the assets-based size thresholds that determine eligibility for R&D tax relief, we implement a Regression Discontinuity (RD) Design using administrative data. We find statistically and economically significant effects of tax relief on (quality-adjusted) patenting (and R&D) that persist up to seven years after the change. Moreover, we also find causal evidence of R&D spillovers on the innovation of technologically close peer firms. We can rule out elasticities of patenting with respect to the user cost of R&D of under 2 at the 5% level and show evidence that our large effects are likely because the treated group are more likely to be financially constrained

L'Innovation Technologique Face au Défit Climatique: Quelle est la Position de la France?

International audienc

CCCEP II: Carbon, competitiveness and trade 2007-2009

This project relied on secondary analysis of data to examine the impact of the European Union Emissions Trading System (EU ETS) on the geographical distribution of carbon emissions within multinational companies based on data from the Carbon Disclosure Project for the period 2007- 2009. Our data includes regional emissions of 435 companies, of which 47 are subject to EU ETS regulation. CCCEP was established in October 2008 with the aim of advancing public and private action on climate change through rigorous, innovative research. Even though much of our research is ongoing, we have made several major academic contributions: (1) Improving understanding of the uncertainties in climate models, developing state-of-the-art economic models of decision-making under uncertainty and applying them to climate change, and pursuing novel methods of participatory assessment/modelling. (2) Exploring different routes to a global climate agreement and alternatives to state-based governance, all the time emphasising the role of institutions. (3) Advancing knowledge on the potential for climate-friendly forms of development, and development-friendly forms of adaptation. We have advanced new integrated methodologies for identifying adaptation priorities, including 'vulnerability hotspots'. (4) Conducting interdisciplinary research on interventions towards a low-carbon economy, including robust econometric evaluation of the impacts of existing policies, analysis of carbon markets that bridges theory and practice, and an examination of the roles of states and markets. (5) Developing new methodologies bridging the gap between macro-scale simulation modelling and micro-scale, context-specific approaches. To build research capacity, we have strengthened the links between key disciplines and the climate debate, trained over 50 PhD students and provided new university courses at all levels. We have actively engaged with key decision-makers at all stages of the research process, influencing the UN climate negotiations at a high level, working closely with the World Bank and other international organisations, engaging heavily in UK climate policy on critical issues such as the fourth statutory carbon budget, impacting on policy-making in many other countries and engaging with private decision-makers, e.g. through our collaboration with Munich Re. We have also secured c. £28 million in leveraged funding. Extensive consultations have highlighted the need to address the financial crisis/downturn, the continuing absence of a comprehensive international climate treaty, and recent controversies on climate science. They have stressed the need for more integrated approaches to climate research, to continue making a distinctive contribution in the context of other climate research, and to contribute to ESRC Strategic Priorities. Our five research themes for Phase Two are: 1. Understanding green growth and climate-compatible development: what could constitute green growth or climate-compatible development in industrialised and developing countries? 2. Advancing climate finance and investment: how can we unlock major flows of finance into both adaptation and mitigation in different contexts? What are the implications of such flows? 3. Evaluating the performance of climate policies: how can we assess the performance of different climate policies and how can we understand the scope for policy learning? 4. Managing climate risks and uncertainties and strengthening climate services: how can we promote new approaches to the assessment, management and communication of climate risks/uncertainties? 5. Enabling rapid transitions in mitigation and adaptation: how can we understand the scope for rapid transitions to dramatically cut emissions and adapt to significant climate change? Beyond the planned scientific programme, we propose to a CCCEP Innovation Fund with the aim of stimulating, developing and disseminating innovative ideas from both the academic and practitioner communities. Our plans for Phase Two build on the solid institutional foundations of Phase One, including CCCEP's position at LSE/Leeds, its management structure and its key staff. However, we also plan to refresh the team. We will continue to engage with key stakeholders throughout the research process and to exploit a range of pathways to impact.</p

CCCEP II: Carbon, competitiveness and trade 2007-2009

This project relied on secondary analysis of data to examine the impact of the European Union Emissions Trading System (EU ETS) on the geographical distribution of carbon emissions within multinational companies based on data from the Carbon Disclosure Project for the period 2007- 2009. Our data includes regional emissions of 435 companies, of which 47 are subject to EU ETS regulation. CCCEP was established in October 2008 with the aim of advancing public and private action on climate change through rigorous, innovative research. Even though much of our research is ongoing, we have made several major academic contributions: (1) Improving understanding of the uncertainties in climate models, developing state-of-the-art economic models of decision-making under uncertainty and applying them to climate change, and pursuing novel methods of participatory assessment/modelling. (2) Exploring different routes to a global climate agreement and alternatives to state-based governance, all the time emphasising the role of institutions. (3) Advancing knowledge on the potential for climate-friendly forms of development, and development-friendly forms of adaptation. We have advanced new integrated methodologies for identifying adaptation priorities, including 'vulnerability hotspots'. (4) Conducting interdisciplinary research on interventions towards a low-carbon economy, including robust econometric evaluation of the impacts of existing policies, analysis of carbon markets that bridges theory and practice, and an examination of the roles of states and markets. (5) Developing new methodologies bridging the gap between macro-scale simulation modelling and micro-scale, context-specific approaches. To build research capacity, we have strengthened the links between key disciplines and the climate debate, trained over 50 PhD students and provided new university courses at all levels. We have actively engaged with key decision-makers at all stages of the research process, influencing the UN climate negotiations at a high level, working closely with the World Bank and other international organisations, engaging heavily in UK climate policy on critical issues such as the fourth statutory carbon budget, impacting on policy-making in many other countries and engaging with private decision-makers, e.g. through our collaboration with Munich Re. We have also secured c. £28 million in leveraged funding. Extensive consultations have highlighted the need to address the financial crisis/downturn, the continuing absence of a comprehensive international climate treaty, and recent controversies on climate science. They have stressed the need for more integrated approaches to climate research, to continue making a distinctive contribution in the context of other climate research, and to contribute to ESRC Strategic Priorities. Our five research themes for Phase Two are: 1. Understanding green growth and climate-compatible development: what could constitute green growth or climate-compatible development in industrialised and developing countries? 2. Advancing climate finance and investment: how can we unlock major flows of finance into both adaptation and mitigation in different contexts? What are the implications of such flows? 3. Evaluating the performance of climate policies: how can we assess the performance of different climate policies and how can we understand the scope for policy learning? 4. Managing climate risks and uncertainties and strengthening climate services: how can we promote new approaches to the assessment, management and communication of climate risks/uncertainties? 5. Enabling rapid transitions in mitigation and adaptation: how can we understand the scope for rapid transitions to dramatically cut emissions and adapt to significant climate change? Beyond the planned scientific programme, we propose to a CCCEP Innovation Fund with the aim of stimulating, developing and disseminating innovative ideas from both the academic and practitioner communities. Our plans for Phase Two build on the solid institutional foundations of Phase One, including CCCEP's position at LSE/Leeds, its management structure and its key staff. However, we also plan to refresh the team. We will continue to engage with key stakeholders throughout the research process and to exploit a range of pathways to impact.</p

Determinants of the Pace of Global Innovation in Energy Technologies

Understanding the factors driving innovation in energy technologies is of critical importance to mitigating climate change and addressing other energy-related global challenges. Low levels of innovation, measured in terms of energy patent filings, were noted in the 1980s and 90s as an issue of concern and were attributed to limited investment in public and private research and development (R&D). Here we build a comprehensive global database of energy patents covering the period 1970–2009, which is unique in its temporal and geographical scope. Analysis of the data reveals a recent, marked departure from historical trends. A sharp increase in rates of patenting has occurred over the last decade, particularly in renewable technologies, despite continued low levels of R&D funding. To solve the puzzle of fast innovation despite modest R&D increases, we develop a model that explains the nonlinear response observed in the empirical data of technological innovation to various types of investment. The model reveals a regular relationship between patents, R&D funding, and growing markets across technologies, and accurately predicts patenting rates at different stages of technological maturity and market development. We show quantitatively how growing markets have formed a vital complement to public R&D in driving innovative activity. These two forms of investment have each leveraged the effect of the other in driving patenting trends over long periods of time.National Science Foundation (U.S.) (Grant SBE-0738187)Solomon Buchsbaum AT&T Research Fun