Impact of Renewable Energy Policy and Use on Innovation: A Literature Review

Felix Groba () and Barbara Breitschopf

No 1318, Discussion Papers of DIW Berlin from DIW Berlin, German Institute for Economic Research

Abstract: Technological changes in renewable energy technologies play an important role in the context of climate change as they contribute to a reduction of technology costs and lead to an increasing market penetration of emission reducing technologies. This paper provides a comprehensive literature review highlighting numerous motivations and necessities underlying the introduction of renewable energy policies. Starting with a brief overview on the induced innovation hypothesis, we show that policy intervention has been an effective tool to change relative prices, thus, incentivizing innovation, but that also various influencing factors are at play. We show that the literature agrees on the need for specific renewable energy policies in order to overcome concomitant market failures and barrier. We highlight that technology specific policies are generally understood as necessary complements to environmental non-technology specific policies in order to generate adequate demand in energy markets. However, in that respect, we outline the ongoing debate on the effectiveness of different technology specific policies on the demand-pull side and the role of technology-push policies. Additionally we provide a summary on methodological approaches to measure policy efforts and technological change respecting different impact levels and stages within the technological change process. Finally, by focusing on international competitiveness and technology cost we highlight two aspects of the effects renewable technology innovation and respective policy support.

JEL-codes: N70 O31 O32 O57 (search for similar items in EconPapers)
Pages: 41 p.
Date: 2013
New Economics Papers: this item is included in nep-cse, nep-ene, nep-env, nep-ino, nep-law, nep-pke, nep-reg and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (25)

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