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Induced innovation in energy technologies and systems : a review of evidence and potential implications for CO2 mitigation

  • We conduct a systematic, 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 otherWe conduct a systematic, 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. (1) 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. (2) 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. (3) Overall Innovation is cumulative, multi-faceted, and self-reinforcing in its direction (path-dependent). We conclude with brief observations on implications for modeling 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.show moreshow less

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Metadaten
Document Type:Peer-Reviewed Article
Author:Michael Grubb, Paul Drummond, Alexandra Poncia, Will McDowall, David Popp, Sascha SamadiORCiD, Cristina Penasco, Kenneth Gillingham, Sjak Smulders, Matthieu Glachant, Gavin Hassall, Emi Mizuno, Edward S. Rubin, Antoine Dechezlepretre, Giulia Pavan
URN (citable link):https://nbn-resolving.org/urn:nbn:de:bsz:wup4-opus-76999
Year of Publication:2021
Language:English
Source Title (English):Environmental research letters
DOI:https://doi.org/10.1088/1748-9326/abde07
Volume:16
Issue:4
Article Number:043007
Divisions:Zukünftige Energie- und Industriesysteme
Dewey Decimal Classification:600 Technik, Medizin, angewandte Wissenschaften
OpenAIRE:OpenAIRE
Licence:License LogoCreative Commons - CC BY - Namensnennung 4.0 International