Induced Innovation, Inventors, and the Energy Transition

Eugénie Dugoua (London School of Economics)

May 9, 2022, 11:00–12:15


Room Auditorium 4

Environment Economics Seminar


Reducing carbon emissions requires developing clean technologies, and thus, innovation plays a central role in dealing with climate change. Models of directed technical change show how tax and R&D subsidies can rapidly redirect scientists’ research activities towards the clean sector. This project investigates whether inventors can be induced to work on cleaner technologies and the kinds of adjustment costs they face. To do so, we use patent data to describe inventors’ specialization across fields and over time, and we leverage quasi-random variation in energy prices to explore whether prices can induce inventors to shift their activities. We find that inventors patenting both on clean and dirty technologies are rare and only a small sub-sample of dirty inventors are susceptible to inducement. These results imply that inventors may not easily adjust to climate policy and stress the need for early-stage supply-side innovation policies to increase the pool of new clean inventors. (work with Todd Gerarden - Cornell University)