Explaining the Slow Pace of Energy Technological Innovation: Why Market Conditions Matter

Wei Jin and ZhongXiang Zhang

No 249420, Working Papers from Australian National University, Centre for Climate Economics & Policy

Abstract: As a useful complement to numerous innovation policy studies from a normative perspective, this paper provides a positive framework to analyze the basic economic mechanism of energy technological innovation and explain its slow pace of technological progress. We find that the capital-intensiveness of energy technology is an inhibiting factor to catalyze market size effect and slows innovations and diffusions of energy technology in the market. We also show that the substantial homogeneity of energy products leads to both a monopolistic market structure on the supply side and a weak level of positive pecuniary externality on the demand side, both dampening the incentive of innovation. On the basis of our economic analysis, we recommend that a package of assets of energy technologies; 2) deregulating monopolistic energy-supplying markets; and 3) differentiating the homogenous energy products.

Keywords: Research and Development/Tech Change/Emerging Technologies; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 25
Date: 2014-01
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Explaining the Slow Pace of Energy Technological Innovation Why Market Conditions Matter? (2014)
Working Paper: Explaining the Slow Pace of Energy Technological Innovation: Why Market Conditions Matter (2014)
Working Paper: Explaining the Slow Pace of Energy Technological Innovation: Why Market Conditions Matter? (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ancewp:249420

DOI: 10.22004/ag.econ.249420

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