Directing technical change from fossil-fuel to renewable energy innovation: An application using firm-level patent data

Noailly, Joëlle; Smeets, Roger

doi:10.1016/j.jeem.2015.03.004

Cited by 144 publications

(38 citation statements)

References 42 publications

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“…The gap between the patents in fossil fuel and renewable energy technology can be decreased through policies encouraging the market entrance of companies which are specialized in renewable technologies [34]. The integration degree between different technology classes of environmental patents is important to the environmental productivity performance of companies, as highlighted by Aldieri et al (2017) in the case of water pollution.…”

Section: Introductionmentioning

confidence: 99%

The Relationship between Economic Complexity, Energy Consumption Structure and Greenhouse Gas Emission: Heterogeneous Panel Evidence from the EU Countries

2019

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The aim of the paper is to examine the long-term relationship between economic complexity, energy consumption structure, and greenhouse gas emission, within a panel of European Union countries and two subpanels: (i) European economies with higher economic complexity and (ii) European economies with a lower level of economic complexity. Taking into consideration the heterogeneity among European countries, the heterogeneous panel technique is used, including panel estimation through fully modified least squares (FMOLS) and dynamic ordinary least squares (DOLS). The empirical findings indicate a long-term equilibrium relationship between economic complexity, energy consumption structure and greenhouse gas emission within all three panels. Economic complexity and energy consumption structure have a statistically significant impact on greenhouse gas emission within all panels, but the influence is higher within the subpanel of countries with a lower level of economic complexity, suggesting a higher risk of pollution as the economic complexity grows and as the energy balance inclines in favor of non-renewable energy consumption. Our paper suggests that the economic complexity is a variable that must be taken into consideration when national economic and energy policies are shaped. Finally, policy implications for each panel of countries are discussed.

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Section: Introductionmentioning

confidence: 99%

The Relationship between Economic Complexity, Energy Consumption Structure and Greenhouse Gas Emission: Heterogeneous Panel Evidence from the EU Countries

2019

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“…4 An additional mechanism has been identified by the literature about skills and technologies, in which design (along with engineering) has emerged as an important competence for mastering green technologies (Vona et al 2015): a result confirmed by firm-level patent analyses, showing that green innovators are firms operating in design-intensive activities (e.g. Noailly and Smeets 2015). Still though the use of patents, design has been suggested to be a strategic instrument to increase product complexity and thus the appropriability of the EI returns (Horbach, Oltra, and Belin 2013).…”

Section: Background Literaturementioning

confidence: 99%

Design and eco-innovation: micro-evidence from the Eurobarometer survey

Ghisetti

Montresor

2018

Industry and Innovation

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This paper investigates the role of design in making firms ecoinnovate. Going beyond the 'packed' approach of environmental studies about 'eco-design', we maintain that the eco-innovative impact of design is correlated with the firm's decision to invest in it. In turn, design investment is assumed connected with the use firms make of design. By pooling the Eurobarometer 2015 and 2016 surveys, we test for these arguments with respect to a sample of nearly 4500 European and non-European (US and Switzerland) manufacturing firms. Results confirm that the firms' capacity of eco-innovating increases when they invest in design, also by making this investment dependent on the role of design within the firm. The relationship between eco-innovation and design appears robust with respect to the different kinds of 'ecoinnovators' that the Eurobarometer enables us to consider, while some interesting variability emerges when splitting the sample by group of countries and industries.

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“…The use of learning curves has been criticized for example by (Nordhaus, 2014) because correlation is not causation. However, in addition to the broader evidence above, Bettencourt, Trancik, & Kaur (2013) had already established that "growing markets have formed a vital complement to public R&D in driving innovative activity", and one of the most comprehensive subsequent studies (Noailly & Smeets, 2015), found that higher fossil fuel prices and increased renewable market size had both enhanced renewable innovation. All this is consistent with the evidence from patents.…”

Section: Evidence On Market-induced Innovation and Induced Cost Reducmentioning

confidence: 99%

Modeling Myths: On the Need for Dynamic Realism in DICE and other Equilibrium Models of Global Climate Mitigation

Grubb

Wieners

2020

INET Working Paper Series

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We analyze and critique how optimizing Integrated Assessment Models, and specifically the widely-used DICE model, represent abatement costs. Many such models assume temporal independence -abatement costs in one period are not affected by prior abatement. We contrast this with three dimensions of dynamic realism in emitting systems: inertia, induced innovation, and path dependence.We extend the DICE model with a stylized representation of such dynamic factors. By adding a transitional cost component, we characterize the resulting system in terms of its capacity to adapt in path-dependent ways, and the transitional costs of accelerating abatement. We formalize a resulting metric of the pliability of the system, and the characteristic timescales of adjustment.With the resulting DICE-PACE model, we show that in a system with high pliability, the optimal strategy involves much higher initial investment in abatement, sustained at roughly constant levels for some decades, which generates an approximately linear abatement path and emissions declining steadily to zero. This contrasts sharply with the traditional formulation. Characteristic transition timescales of 20-40 years result in an optimum path † Professor of Energy and Climate Change, University College London. m.grubb@ucl.ac.uk ‡ Postdoctoral researcher at which stabilizes global temperatures around a degree below the traditional DICE behavior; with otherwise modest assumptions, a pliable system can generate optimal scenarios within the goals of the Paris Agreement, with far lower long run combined costs of abatement and climate damages.We conclude that representing dynamic realism in such models is as important as -and far more empirically tractable than -continued debate about the monetization of climate damages and 'social cost of carbon'.https://doi.org/10.36687/inetwp106 JEL Codes: Q5, H23, Q54, Q55The aim of the DICE model, and many others following its general philosophy, is to calculate a longterm balance of costs and benefits. Figure 1 shows the results obtained from the most recent version of DICE (2016). With Nordhaus' standard default published assumptions, it produces an emissions path which (after a drop to a present 'optimal level') has modest initial emissions abatement, strengthening over time due to rising climate damages and assumed falling cost of emission abatement. Abatement tends to be deferred, global emissions in 2050 rise back to about present levels before declining at an accelerating rate towards zero early in the next century. The underlying assumptions mean that 'climate damages' -represented as impact on global GDP -remain below 4% of GDP to the end of the century (then doubling by about 2150). Global GDP is assumed to increase seven-fold over the century and climate in the standard DICE is assumed to be a modest issue, with both the global damages and abatement costs having negligible impact on the assumed continued growth in global GDP.

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Directing technical change from fossil-fuel to renewable energy innovation: An application using firm-level patent data

Cited by 144 publications

References 42 publications

The Relationship between Economic Complexity, Energy Consumption Structure and Greenhouse Gas Emission: Heterogeneous Panel Evidence from the EU Countries

The Relationship between Economic Complexity, Energy Consumption Structure and Greenhouse Gas Emission: Heterogeneous Panel Evidence from the EU Countries

Design and eco-innovation: micro-evidence from the Eurobarometer survey

Modeling Myths: On the Need for Dynamic Realism in DICE and other Equilibrium Models of Global Climate Mitigation

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