Induced innovation in energy technologies and systems: a review of evidence and potential implications for CO2 mitigation
We conduct a systematic and 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 reduc...
| Main Authors: | , , , , , , , , , , , , , , |
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| Format: | Article |
| Language: | English |
| Published: |
IOP Publishing
2021-01-01
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| Series: | Environmental Research Letters |
| Subjects: | |
| Online Access: | https://doi.org/10.1088/1748-9326/abde07 |
| _version_ | 1797747790750679040 |
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| author | Michael Grubb Paul Drummond Alexandra Poncia Will McDowall David Popp Sascha Samadi Cristina Penasco Kenneth T Gillingham Sjak Smulders Matthieu Glachant Gavin Hassall Emi Mizuno Edward S Rubin Antoine Dechezleprêtre Giulia Pavan |
| author_facet | Michael Grubb Paul Drummond Alexandra Poncia Will McDowall David Popp Sascha Samadi Cristina Penasco Kenneth T Gillingham Sjak Smulders Matthieu Glachant Gavin Hassall Emi Mizuno Edward S Rubin Antoine Dechezleprêtre Giulia Pavan |
| author_sort | Michael Grubb |
| collection | DOAJ |
| description | We conduct a systematic and 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. (a) 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. (b) 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. (c) Overall innovation is cumulative, multi-faceted, and self-reinforcing in its direction (path-dependent). We conclude with brief observations on implications for modelling 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. |
| first_indexed | 2024-03-12T15:55:39Z |
| format | Article |
| id | doaj.art-57a8aafc636c4a08a96d9aea5fa1f62a |
| institution | Directory Open Access Journal |
| issn | 1748-9326 |
| language | English |
| last_indexed | 2024-03-12T15:55:39Z |
| publishDate | 2021-01-01 |
| publisher | IOP Publishing |
| record_format | Article |
| series | Environmental Research Letters |
| spelling | doaj.art-57a8aafc636c4a08a96d9aea5fa1f62a2023-08-09T14:54:38ZengIOP PublishingEnvironmental Research Letters1748-93262021-01-0116404300710.1088/1748-9326/abde07Induced innovation in energy technologies and systems: a review of evidence and potential implications for CO2 mitigationMichael Grubb0https://orcid.org/0000-0003-2393-3041Paul Drummond1https://orcid.org/0000-0002-6921-0474Alexandra Poncia2Will McDowall3https://orcid.org/0000-0002-4238-0692David Popp4Sascha Samadi5https://orcid.org/0000-0002-4939-2872Cristina Penasco6https://orcid.org/0000-0003-1187-5358Kenneth T Gillingham7https://orcid.org/0000-0002-7329-2660Sjak Smulders8https://orcid.org/0000-0003-3753-6469Matthieu Glachant9https://orcid.org/0000-0003-1765-9998Gavin Hassall10Emi Mizuno11Edward S Rubin12https://orcid.org/0000-0003-3374-1553Antoine Dechezleprêtre13https://orcid.org/0000-0003-2477-816XGiulia Pavan14UCL (University College London), Institute for Sustainable Resources , London, United KingdomUCL (University College London), Institute for Sustainable Resources , London, United KingdomUCL (University College London), Institute for Sustainable Resources , London, United KingdomUCL (University College London), Institute for Sustainable Resources , London, United KingdomSyracuse University, Maxwell School , Syracuse, NY, United States of America; NBER , Cambridge, MA, United States of AmericaWuppertal Institute for Climate, Environment and Energy , Wuppertal, GermanyDepartment of Politics and International Studies (POLIS) and Centre for Environment, Energy and Natural Resources Governance (C-EENRG), Department of Land Economy, University of Cambridge , Cambridge, United KingdomNBER , Cambridge, MA, United States of America; Yale University, Yale School of the Environment , Newhaven, CT, United States of AmericaTilburg University , Tilburg, The NetherlandsMINES Paris Tech, PSL University , Paris, FranceWarwick University , Coventry, United KingdomSustainable Energy for ALL , Vienna, AustriaCarnegie Mellon University , Pittsburgh, PA, United States of AmericaGrantham Research Institute on Climate Change and the Environment, London School of Economics , London, United KingdomCompass Lexecon , Madrid, SpainWe conduct a systematic and 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. (a) 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. (b) 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. (c) Overall innovation is cumulative, multi-faceted, and self-reinforcing in its direction (path-dependent). We conclude with brief observations on implications for modelling 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.https://doi.org/10.1088/1748-9326/abde07energy innovationendogenous technological changelearning by doinginduced innovationCO2 mitigation costsinnovation policy |
| spellingShingle | Michael Grubb Paul Drummond Alexandra Poncia Will McDowall David Popp Sascha Samadi Cristina Penasco Kenneth T Gillingham Sjak Smulders Matthieu Glachant Gavin Hassall Emi Mizuno Edward S Rubin Antoine Dechezleprêtre Giulia Pavan Induced innovation in energy technologies and systems: a review of evidence and potential implications for CO2 mitigation Environmental Research Letters energy innovation endogenous technological change learning by doing induced innovation CO2 mitigation costs innovation policy |
| title | Induced innovation in energy technologies and systems: a review of evidence and potential implications for CO2 mitigation |
| title_full | Induced innovation in energy technologies and systems: a review of evidence and potential implications for CO2 mitigation |
| title_fullStr | Induced innovation in energy technologies and systems: a review of evidence and potential implications for CO2 mitigation |
| title_full_unstemmed | Induced innovation in energy technologies and systems: a review of evidence and potential implications for CO2 mitigation |
| title_short | Induced innovation in energy technologies and systems: a review of evidence and potential implications for CO2 mitigation |
| title_sort | induced innovation in energy technologies and systems a review of evidence and potential implications for co2 mitigation |
| topic | energy innovation endogenous technological change learning by doing induced innovation CO2 mitigation costs innovation policy |
| url | https://doi.org/10.1088/1748-9326/abde07 |
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