The role of markets and policies in delivering innovation for climate change mitigation

• Published in: Oxford review of economic policy Vol. 26; no. 2; pp. 253 - 269
• Main Author: Newell, Richard G.
• Format: Journal Article
• Language: English
• Published: Oxford Oxford University Press 01-06-2010; Oxford Publishing Limited (England)
• Subjects: Business innovation; Climate change; Climate change policy; Economic theory; Emissions policy; energy; Energy technology; Environmental policy; Environmental technology; Externality; High technology; innovation; Innovation diffusion; Innovations; Inventions; New technology; O31; O38; policy; Pollutant emissions; Pollution control; Q54; Q58; R&D; Research & development; Research and development; Studies; Technological change; Technological innovation; technology; Technology assessment; Technology policy
• ISSN: 0266-903X; 1460-2121
• DOI: 10.1093/oxrep/grq009

This paper identifies market incentives and international and domestic policies that could technologically alter energy systems to achieve greenhouse gas stabilization targets while also meeting other societal goals. I consider the conceptual basis and empirical evidence on the effectiveness and efficiency of climate technology policies. The paper reviews the literature on trends and prospects for innovation in climate change mitigation and examines the evidence on induced innovation and the implications for the choice of technology policy. I then consider the impact of technological advances on the environment, the role of direct government support for R&D, and the complementarities between policies internalizing environmental externalities and those aimed at environmental innovations.