Improving the Energy-Efficiency of Buildings: The Impact of Environmental Policy on Technological Innovation

This paper investigates the impact of alternative environmental policy instruments on technological innovations aiming to improve energy-efficiency in buildings. The empirical analysis focuses on three main types of policy instruments, namely regulatory energy standards in buildings codes, energy taxes as captured by energy prices and specific governmental energy R&D expenditures. Technological innovation is measured using patent counts for specific technologies related to energy-efficiency in buildings (e.g. insulation, high-efficiency boilers, energy-saving lightings). The estimates for seven European countries over the 1989-2004 period imply that a strengthening of 10% of the minimum insulation standards for walls would increase the likelihood to file additional patents by about 3%. In contrast, energy prices have no significant effect on the likelihood to patent. Governmental energy R&D support has a small positive significant effect on patenting activities.Innovation, Technological Change, Patents, Energy-Efficiency, Buildings, Environmental Policy

Local and Global Interactions in an Evolutionary Resource Game

Conditions for the emergence of cooperation in a spatial common-pool resource game are studied. This combines in a unique way local and global interactions. A fixed number of harvesters are located on a spatial grid. Harvesters choose among three strategies: defection, cooperation, and enforcement. Individual payoffs are affected by both global factors, namely, aggregate harvest and resource stock level, and local factors, such as the imposition of sanctions on neighbors by enforcers. The evolution of strategies in the population is driven by social learning through imitation. Numerous types of equilibria exist in these settings. An important new finding is that clusters of cooperators and enforcers can survive among large groups of defectors. We discuss how the results contrast with the non-spatial, but otherwise similar, game of Sethi and Somanathan (1996).Common property, Cooperation, Evolutionary game theory, Global interactions, Local interactions, Social norms

Spatial Evolution of Social Norms in a Common-Pool Resource Game

We study the conditions for the emergence of cooperation in a spatial common-pool resource game. We consider three types of agents: cooperators, defectors and enforcers. The role of enforcers is to punish defectors for overharvesting the resource. Agents are located around a circle and they only observe the actions of their two nearest neighbors. Their payoffs are determined by both local and global interactions and they modify their actions by imitating the strategy in their neighborhood with the highest payoffs on average. Using theoretical and numerical analysis, we find that a large diversity of equilibria exists in this game. In particular, we derive conditions for the occurrence of equilibria in which the three strategies coexist. We also discuss the stability of these equilibria. Finally, we show that introducing resource dynamics favors the occurrence of cooperative equilibria.Common property, Evolutionary game theory, Local interactions game, Self-organization, Cooperation

Local and global interactions in an evolutionary resource game

Conditions for the emergence of cooperation in a spatial common-pool resource game are studied. This combines in a unique way local and global interactions. A fixed number of harvesters are located on a spatial grid. Harvesters choose among three strategies: defection, cooperation, and enforcement. Individual payoffs are affected by both global factors, namely, aggregate harvest and resource stock level, and local factors, such as the imposition of sanctions on neighbors by enforcers. The evolution of strategies in the population is driven by social learning through imitation, based on local interaction or locally available information. Numerous types of equilibria exist in these settings. An important new finding is that clusters of cooperators and enforcers can survive among large groups of defectors. We discuss how the results contrast with the non-spatial, but otherwise similar, game of Sethi and Somanathan (American Economic Review 86(4):766–789, 1996)

Financing Energy Innovation: Internal Finance and the Direction of Technical Change

Achieving the goals of the Paris Agreement and of climate neutrality by 2050 in the European Union will require mobilizing financial investments towards clean energy innovation. This study examines the role of internal finance (cash flows and cash holdings) and financing constraints for innovation in energy technologies. We construct a dataset for 1,300 European firms combining balance-sheet information and patenting activities in renewable (REN) and fossil-fuel (FF) technologies and estimate the sensitivity of patenting activities to firms’ internal finance. We use count estimation techniques and control for a large set of firm-specific characteristics and market developments in REN and FF technologies. We find that patenting activities of firms specialized in REN innovation are significantly more sensitive to a shock in cash flows than firms specializing in FF innovation. Hence, our results emphasize that innovative firms in clean energy may be particularly vulnerable to financing constraints. We discuss the implications of these results for energy transition policies aiming to redirect finance towards clean energy R&D

Knowledge spillovers from renewable energy technologies:Lessons from patent citations

This paper studies the knowledge spillovers generated by renewable energy technologies, unraveling the technological fields that benefit from knowledge developed in storage, solar, wind, marine, hydropower, geothermal, waste and biomass energy technologies. Using citation data of patents in renewable technologies filed at 18 European patent offices over the 1978–2006 period, the analysis examines the importance of knowledge flows within the same specific technological field (intra-technology spillovers), to other technologies in the field of power-generation (inter-technology spillovers), and to technologies unrelated to power-generation (external-technology spillovers). The results show significant differences across various technologies. Overall, patents in wind, storage and solar technologies tend to be more frequently cited than other technologies. While wind technologies mainly find applications within their own field, a large share of innovations in solar energy and storage technologies find applications outside the field of power generation. The paper discusses the implications of these results for policymaking

Directing Technical Change from Fossil-Fuel to Renewable Energy Innovation: An Empirical Application Using Firm-Level Patent Data

This paper investigates the determinants of directed technical change in the electricity generation sector. We use firm-level data on patents led in renewable (REN) and fossil fuel (FF) technologies by about 7,000 European firms over the period 1978-2006. We separately study specialized firms that innovate in only one type of technology during the sample period, and mixed firms that innovate in both technologies. We find that for specialized firms the main drivers of innovation are fossil-fuel prices, market size, and firms' past knowledge stocks. Also, prices and market size drive the entry of new REN firms into innovation. By contrast, we find that innovation by mixed firms is mainly driven by strong path-dependencies since for these firms past knowledge stock is the major driver of the direction of innovation. These results imply that generic environmental policies that affect prices and energy demand are mainly effective in directing innovation by small specialized firms. In order to direct innovation e orts of large mixed corporations with a long history of FF innovation, targeted R&D policies are likely to be more effective

Innovation, Diffusion, Growth and the Environment:Taking Stock and Charting New Directions

The objective of this article is to provide a succinct review of the main developments in the field of research on the economics of growth, innovation, diffusion and the environment. We focus on the last fifteen to twenty years of scientific advances in the field as this corresponds to: (i) the consensus on the theoretical side on endogenous economic growth modelling, and (ii) the growing empirical work on innovation and diffusion due to the development of patent data. As very good reviews already exist in the literature, we only provide a brief and non-exhaustive discussion aiming at taking stock of some recent developments and charting new issues for a future research agenda

Entry and competition in the Dutch notary profession

We investigate changes in competition in the Dutch notary profession after a partial deregulation of the market for notary services enforced by the 1999 Dutch Notary Act. This reform liberalized prices and relieved many entry barriers in the profession, while keeping the professional standard in place. We use the concept of entry thresholds developed by Bresnahan and Reiss (1991) to infer on the effect of entry on competition before and after the regulatory reform. We find that entry affects conduct in the Dutch notary profession as a second notary office in a market requires a much larger market size than a monopoly office to be profitable, suggesting that profit margins drop with entry. Yet, we find no significant differences between entry thresholds ratios before and after the regulatory reform. We discuss potential explanations for the sluggishness of entry in the profession and implications for policy.Legal services Competition Deregulation Entry