The Political Economy of Energy Innovation

Abstract

This paper empirically investigates the effects of environmental policy, institutions, political orientation, and lobbying on energy innovation and finds that they significantly affect the incentives to innovate and create cleaner energy efficient technologies. We conclude that political economy factors may act as barriers even in the presence of stringent environmental policy, implying that, to move towards a greener economy, countries should combine environmental policy with a general strengthening of institutional quality, consider the influence of government's political orientation on environmental policies, and the implications of the size of energy intensive sectors in the economy.

Integrating techno-economic, socio-technical and political perspectives on national energy transitions: A meta-theoretical framework

“…Socio-technical analysis is sometimes combined with political analysis ( [59,32,60,61]) or with energy-economy modelling for future scenario building [62][63][64][65][66]. However, only a few studies offer general blueprints for interdisciplinary integration.…”

Institutions and the Environment: Existing Evidence and Future Directions

“…Silve and Plekhanov (2015) that good quality of economic institutions (measured by WGI) boosts long-term economic growth through innovation. Dasgupta, De Cian, and Verdolini (2016), using data for 20 OECD countries during 1995 -2010, investigate the impact of environmental policy stringency (both market and non-market instruments), governance, political orientation of governments, and distribution of resources to energy intensive industries on energy R&D and patents. The authors find that market-based incentives and to some extent non-market based incentives, results in dynamic efficiency gains; countries with better governance are characterized by higher levels of energy-related R&D; left-wing governments are more likely to devote R&D resources to the energy sector; while larger energy intensive sectors can induce market-size effects and have more power to lobby for more resources to be allocated to energy R&D.…”

“…The transition toward a low-carbon and sustainable economy will require a fundamental transformation of energy, economic, and social systems. Designing targeted economic and environmental policies will play a crucial role in steering and fostering the transition but will need to be combined with a more general improvement of institutions to ensure that policies are implemented and monitored effectively (Dasgupta, De Cian, and Verdolini 2016).…”

The Political Economy of Clean Energy Transitions

“…Input-output data can be used to provide an estimate of energy-related R&D expenditures including the research performed in other economic sectors that are embedded in the capital purchased by the electricity and the mining sectors. Dasgupta, De Cian, and Verdolini (2016) provide a detailed description and application of this method.…”