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Induced Innovation, Inventors, and the Energy Transition

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  • Eugenie Dugoua
  • Todd D. Gerarden

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.

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  • Eugenie Dugoua & Todd D. Gerarden, 2025. "Induced Innovation, Inventors, and the Energy Transition," American Economic Review: Insights, American Economic Association, vol. 7(1), pages 90-106, March.
    • Handle: RePEc:aea:aerins:v:7:y:2025:i:1:p:90-106
    DOI: 10.1257/aeri.20230522
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    2. Jee, Su Jung & Srivastav, Sugandha, 2024. "Knowledge spillovers between clean and dirty technologies: Evidence from the patent citation network," Ecological Economics, Elsevier, vol. 224(C).

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    More about this item

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • Q35 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Hydrocarbon Resources
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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