Induced innovation, inventors, and the energy transition

Eugenie Dugoua and Todd D. Gerarden

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We study how individual inventors respond to incentives to work on “clean” electricity technologies. Using natural gas price variation, we estimate output and entry elasticities of inventors and measure the medium-term impacts of a price increase mirroring the social cost of carbon. We find that the induced clean innovation response primarily comes from existing clean inventors. New inventors are less responsive on the margin than their average contribution to clean energy patenting would indicate. Our results strengthen the rationale for government intervention to expedite the energy transition.

Keywords: inventors; energy technology; induced innovation (search for similar items in EconPapers)
JEL-codes: O31 Q40 Q55 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2025-03-01
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Published in American Economic Review: Insights, 1, March, 2025, 7(1), pp. 90 – 106. ISSN: 2640-205X

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