IDEAS home Printed from https://ideas.repec.org/p/oec/envaaa/123-en.html
   My bibliography  Save this paper

The empirics of enabling investment and innovation in renewable energy

Author

Listed:
  • Geraldine Ang

    (OECD)

  • Dirk Röttgers

    (OECD)

  • Pralhad Burli

    (Montclair State University)

Abstract

This working paper undertakes econometric analysis to assess the impacts of climate mitigation policies and the quality of the investment environment on investment and innovation in renewable power in OECD and G20 countries. It also assesses how countries’ investment environments interact with climate mitigation policies to influence investment and patent activity in renewable power. The paper gathered and tested data across OECD and G20 countries on more than 70 explanatory variables, which were analysed using two Poisson-family regression models: one to investigate determinants of investment flows in renewable power from 2000 until 2014; and one to investigate determinants of patent counts in renewable-power technologies from 2000 until 2012. Results of the econometric analysis are consistent with the main hypothesis in this paper that beyond setting climate mitigation policies, policy makers need to strengthen the general investment environment and align it with climate mitigation policies in order to mobilise investment and innovation in renewable power across OECD and G20 countries.

Suggested Citation

  • Geraldine Ang & Dirk Röttgers & Pralhad Burli, 2017. "The empirics of enabling investment and innovation in renewable energy," OECD Environment Working Papers 123, OECD Publishing.
    • Handle: RePEc:oec:envaaa:123-en
    DOI: 10.1787/67d221b8-en
    as

    Download full text from publisher

    File URL: https://doi.org/10.1787/67d221b8-en
    Download Restriction: no
    File URL: https://libkey.io/10.1787/67d221b8-en?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Yang, Ming & Blyth, William & Bradley, Richard & Bunn, Derek & Clarke, Charlie & Wilson, Tom, 2008. "Evaluating the power investment options with uncertainty in climate policy," Energy Economics, Elsevier, vol. 30(4), pages 1933-1950, July.
    2. Valentina Meliciani, 2000. "The relationship between R&D, investment and patents: a panel data analysis," Applied Economics, Taylor & Francis Journals, vol. 32(11), pages 1429-1437.
    3. Nick Johnstone & Ivan Haščič & David Popp, 2010. "Renewable Energy Policies and Technological Innovation: Evidence Based on Patent Counts," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(1), pages 133-155, January.
    4. Polzin, Friedemann & Migendt, Michael & Täube, Florian A. & von Flotow, Paschen, 2015. "Public policy influence on renewable energy investments—A panel data study across OECD countries," Energy Policy, Elsevier, vol. 80(C), pages 98-111.
    5. Victoria Shestalova & Chiara Criscuolo & Nick Johnstone & Carlo Menon, 2014. "Renewable energy policies and cross-border investment: evidence from M&A in solar and wind energy," CPB Discussion Paper 288, CPB Netherlands Bureau for Economic Policy Analysis.
    6. Antoine Dechezleprêtre & Matthieu Glachant & Yann Ménière, 2013. "What Drives the International Transfer of Climate Change Mitigation Technologies? Empirical Evidence from Patent Data," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 54(2), pages 161-178, February.
    7. Jean-Marc Fournier, 2016. "The Positive Effect of Public Investment on Potential Growth," OECD Economics Department Working Papers 1347, OECD Publishing.
    8. World Bank, 2015. "World Development Indicators 2015," World Bank Publications - Books, The World Bank Group, number 21634.
    9. Criscuolo, Chiara & Menon, Carlo, 2015. "Environmental policies and risk finance in the green sector: Cross-country evidence," Energy Policy, Elsevier, vol. 83(C), pages 38-56.
    10. Samuel Kortum & Josh Lerner, 2000. "Assessing the Contribution of Venture Capital to Innovation," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 674-692, Winter.
    11. Iršová, Zuzana & Havránek, Tomáš, 2013. "Determinants of Horizontal Spillovers from FDI: Evidence from a Large Meta-Analysis," World Development, Elsevier, vol. 42(C), pages 1-15.
    12. Kahn, Edward, 1996. "The production tax credit for wind turbine powerplants is an ineffective incentive," Energy Policy, Elsevier, vol. 24(5), pages 427-435, May.
    13. Hellmann, Thomas & Puri, Manju, 2000. "The Interaction between Product Market and Financing Strategy: The Role of Venture Capital," The Review of Financial Studies, Society for Financial Studies, vol. 13(4), pages 959-984.
    14. Hausman, Jerry & Hall, Bronwyn H & Griliches, Zvi, 1984. "Econometric Models for Count Data with an Application to the Patents-R&D Relationship," Econometrica, Econometric Society, vol. 52(4), pages 909-938, July.
    15. Joëlle Noailly & Victoria Shestalova, 2013. "Knowledge spillovers from renewable energy technologies, Lessons from patent citations," CPB Discussion Paper 262, CPB Netherlands Bureau for Economic Policy Analysis.
    16. Felix Groba & Barbara Breitschopf, 2013. "Impact of Renewable Energy Policy and Use on Innovation: A Literature Review," Discussion Papers of DIW Berlin 1318, DIW Berlin, German Institute for Economic Research.
    17. Park, Trevor & Casella, George, 2008. "The Bayesian Lasso," Journal of the American Statistical Association, American Statistical Association, vol. 103, pages 681-686, June.
    18. Heymi Bahar & Jagoda Egeland & Ronald Steenblik, 2013. "Domestic Incentive Measures for Renewable Energy With Possible Trade Implications," OECD Trade and Environment Working Papers 2013/1, OECD Publishing.
    19. Martin, Stephen & Scott, John T., 2000. "The nature of innovation market failure and the design of public support for private innovation," Research Policy, Elsevier, vol. 29(4-5), pages 437-447, April.
    20. Maryann Feldman, 1999. "The New Economics Of Innovation, Spillovers And Agglomeration: Areview Of Empirical Studies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 8(1-2), pages 5-25.
    21. Gabriela Elizondo Azuela & Luiz Barroso, 2014. "Promoting Renewable Energy through Auctions," World Bank Publications - Reports 18674, The World Bank Group.
    22. Noailly, Joëlle & Smeets, Roger, 2013. "Directing Technical Change from Fossil-Fuel to Renewable Energy Innovation: An Empirical Application Using Firm-Level Patent Data," Climate Change and Sustainable Development 148921, Fondazione Eni Enrico Mattei (FEEM).
    23. Christopher Kennedy & Jan Corfee-Morlot, 2012. "Mobilising Investment in Low Carbon, Climate Resilient Infrastructure," OECD Environment Working Papers 46, OECD Publishing.
    24. Ashish Khana & Luiz Barroso, 2014. "Promoting Renewable Energy through Auctions : The Case of India," World Bank Publications - Reports 18673, The World Bank Group.
    25. Joelle Noailly & Victoria Shestalova, 2013. "Knowledge Spillovers from Renewable energy Technologies, Lessons from patent citations," CIES Research Paper series 22-2013, Centre for International Environmental Studies, The Graduate Institute.
    26. Bessen, James, 2008. "The value of U.S. patents by owner and patent characteristics," Research Policy, Elsevier, vol. 37(5), pages 932-945, June.
    27. Isabell Koske & Isabelle Wanner & Rosamaria Bitetti & Omar Barbiero, 2015. "The 2013 update of the OECD's database on product market regulation: Policy insights for OECD and non-OECD countries," OECD Economics Department Working Papers 1200, OECD Publishing.
    28. Dan Andrews & Chiara Criscuolo, 2013. "Knowledge-Based Capital, Innovation and Resource Allocation: A Going for Growth Report," OECD Economic Policy Papers 4, OECD Publishing.
    29. Victoria Shestalova & Chiara Criscuolo & Nick Johnstone & Carlo Menon, 2014. "Renewable energy policies and cross-border investment: evidence from M&A in solar and wind energy," CPB Discussion Paper 288.rdf, CPB Netherlands Bureau for Economic Policy Analysis.
    30. Nnaemeka Vincent Emodi & Ganzorig Shagdarsuren & Abdissa Yilma Tiky, 2015. "Influencing Factors Promoting Technological Innovation in Renewable Energy," International Journal of Energy Economics and Policy, Econjournals, vol. 5(3), pages 889-900.
    31. Xiaodong Wang & Luiz Barroso & Gabriela Elizondo, 2014. "Promoting Renewable Energy through Auctions : The Case of China," World Bank Publications - Reports 18676, The World Bank Group.
    32. Kevin Young, 2016. "Tying hands and cutting ties: Explaining the divergence between the EU and the US in global banking reform since the crisis," Journal of Banking Regulation, Palgrave Macmillan, vol. 17(1-2), pages 46-59, March.
    33. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
    34. Ivan Haščič & Mauro Migotto, 2015. "Measuring environmental innovation using patent data," OECD Environment Working Papers 89, OECD Publishing.
    35. Furman, Jeffrey L. & Porter, Michael E. & Stern, Scott, 2002. "The determinants of national innovative capacity," Research Policy, Elsevier, vol. 31(6), pages 899-933, August.
    36. Giovanni Peri, 2005. "Determinants of Knowledge Flows and Their Effect on Innovation," The Review of Economics and Statistics, MIT Press, vol. 87(2), pages 308-322, May.
    37. Ivan Haščič & Miguel Cárdenas Rodríguez & Raphaël Jachnik & Jérôme Silva & Nick Johnstone, 2015. "Public Interventions and Private Climate Finance Flows: Empirical Evidence from Renewable Energy Financing," OECD Environment Working Papers 80, OECD Publishing.
    38. Dan Andrews & Chiara Criscuolo, 2013. "Knowledge-Based Capital, Innovation and Resource Allocation," OECD Economics Department Working Papers 1046, OECD Publishing.
    39. Ivan Haščič & Jérôme Silva & Nick Johnstone, 2015. "The Use of Patent Statistics for International Comparisons and Analysis of Narrow Technological Fields," OECD Science, Technology and Industry Working Papers 2015/5, OECD Publishing.
    40. Mo, Jian-Lei & Agnolucci, Paolo & Jiang, Mao-Rong & Fan, Ying, 2016. "The impact of Chinese carbon emission trading scheme (ETS) on low carbon energy (LCE) investment," Energy Policy, Elsevier, vol. 89(C), pages 271-283.
    41. David Benatia & Tomasz Koźluk, 2016. "The Determinants of Entry in The Electricity Generation Sector in OECD Countries: A Focus on Renewable Energy," OECD Environment Working Papers 111, OECD Publishing.
    42. Joëlle Noailly & Roger Smeets, 2013. "Directing Technical Change from Fossil-Fuel to Renewable Energy Innovation: An Empirical Application Using Firm-Level Patent Data," CPB Discussion Paper 237, CPB Netherlands Bureau for Economic Policy Analysis.
    43. David Popp, 2002. "Induced Innovation and Energy Prices," American Economic Review, American Economic Association, vol. 92(1), pages 160-180, March.
    44. Gabriela Elizondo Azuela & Luiz Barroso & Gabriel Cunha, 2014. "Promoting Renewable Energy through Auctions : The Case of Brazil," World Bank Publications - Reports 18675, The World Bank Group.
    45. Chiara Criscuolo & Nick Johnstone & Carlo Menon & Victoria Shestalova, 2014. "Renewable Energy Policies and Cross-border Investment: Evidence from Mergers and Acquisitions in Solar and Wind Energy," OECD Science, Technology and Industry Working Papers 2014/3, OECD Publishing.
    46. Georg Zachmann & Amma Serwaah & Michele Perruzi, "undated". "When & how to support renewables? Letting the data speak," SIMPATIC Working Papers 951, Bruegel.
    47. Popp, David & Hascic, Ivan & Medhi, Neelakshi, 2011. "Technology and the diffusion of renewable energy," Energy Economics, Elsevier, vol. 33(4), pages 648-662, July.
    48. Jan Corfee-Morlot & Virginie Marchal & Céline Kauffmann & Christopher Kennedy & Fiona Stewart & Christopher Kaminker & Geraldine Ang, 2012. "Towards a Green Investment Policy Framework: The Case of Low-Carbon, Climate-Resilient Infrastructure," OECD Environment Working Papers 48, OECD Publishing.
    49. Raphaël Jachnik & Victor Raynaud, 2015. "Sector-level approach to estimating mobilised private climate finance: The case of renewable energy," OECD Environment Working Papers 98, OECD Publishing.
    50. Nick Johnstone & Ivan Haščič & Margarita Kalamova, 2010. "Environmental Policy Design Characteristics and Technological Innovation: Evidence from Patent Data," OECD Environment Working Papers 16, OECD Publishing.
    51. Joëlle Noailly & Roger Smeets, 2013. "Directing Technical Change from Fossil-Fuel to Renewable Energy Innovation: An Empirical Application Using Firm-Level Patent Data," Working Papers 2013.34, Fondazione Eni Enrico Mattei.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jean Bonnet & Eva Coll-Martinez & Patricia Renou-Maissant, 2019. "Sustainable development. A Comparative Analysis of the Performance of French departments," Economics Working Paper Archive (University of Rennes & University of Caen) 2019-06, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    2. Bongsuk Sung & Woo-Yong Song, 2021. "Are Political Factors More Relevant Than Economic Factors in Firm-Level Renewable Energy Technology Export? Evidence from Path Analysis," Sustainability, MDPI, vol. 13(16), pages 1-16, August.
    3. Ben Naceur, S. & Marton, Katherin & Roulet, Caroline, 2018. "Basel III and bank-lending: Evidence from the United States and Europe," Journal of Financial Stability, Elsevier, vol. 39(C), pages 1-27.
    4. F.H.J. Polzin & M.W.J.L. Sanders, 2019. "How to fill the ‘financing gap’ for the transition to low-carbon energy in Europe?," Working Papers 19-18, Utrecht School of Economics.
    5. Deleidi, Matteo & Mazzucato, Mariana & Semieniuk, Gregor, 2020. "Neither crowding in nor out: Public direct investment mobilising private investment into renewable electricity projects," Energy Policy, Elsevier, vol. 140(C).
    6. Wahidatul Husnaini & Bambang Tjahjadi, 2021. "Quality Management, Green Innovation and Firm Value: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 255-262.
    7. Ekaterina Azarova & Hannah Jun, 2021. "Investigating Determinants of International Clean Energy Investments in Emerging Markets," Sustainability, MDPI, vol. 13(21), pages 1-15, October.
    8. D’Orazio, Paola & Valente, Marco, 2019. "The role of finance in environmental innovation diffusion: An evolutionary modeling approach," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 417-439.
    9. Jean Bonnet & Eva Coll-Martinez & François Raulin & Patricia Renou-Maissant, 2019. "Typology of sustainable development in Normandy: An appraisal at the intermunicipal level," Economics Working Paper Archive (University of Rennes & University of Caen) 2019-05, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    10. Mohsen Khezri & Mohammad Sharif Karimi & Jamal Mamkhezri & Reza Ghazal & Larry Blank, 2022. "Assessing the Impact of Selected Determinants on Renewable Energy Sources in the Electricity Mix: The Case of ASEAN Countries," Energies, MDPI, vol. 15(13), pages 1-15, June.
    11. Polzin, Friedemann & Egli, Florian & Steffen, Bjarne & Schmidt, Tobias S., 2019. "How do policies mobilize private finance for renewable energy?—A systematic review with an investor perspective," Applied Energy, Elsevier, vol. 236(C), pages 1249-1268.
    12. Christian Haas & Karol Kempa, 2023. "Low-Carbon Investment and Credit Rationing," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 86(1), pages 109-145, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mazzucato, Mariana & Semieniuk, Gregor, 2018. "Financing renewable energy: Who is financing what and why it matters," Technological Forecasting and Social Change, Elsevier, vol. 127(C), pages 8-22.
    2. Mare Sarr & Joëlle Noailly, 2017. "Innovation, Diffusion, Growth and the Environment: Taking Stock and Charting New Directions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(3), pages 393-407, March.
    3. Herman, Kyle S. & Xiang, Jun, 2019. "Induced innovation in clean energy technologies from foreign environmental policy stringency?," Technological Forecasting and Social Change, Elsevier, vol. 147(C), pages 198-207.
    4. Quatraro, Francesco & Scandura, Alessandra, 2019. "Academic Inventors and the Antecedents of Green Technologies. A Regional Analysis of Italian Patent Data," Ecological Economics, Elsevier, vol. 156(C), pages 247-263.
    5. Witajewski-Baltvilks, Jan & Verdolini, Elena & Tavoni, Massimo, 2017. "Induced technological change and energy efficiency improvements," Energy Economics, Elsevier, vol. 68(S1), pages 17-32.
    6. Fabrizi, Andrea & Guarini, Giulio & Meliciani, Valentina, 2018. "Green patents, regulatory policies and research network policies," Research Policy, Elsevier, vol. 47(6), pages 1018-1031.
    7. Jan Witajewski-Baltvilks & Elena Verdolini & Massimo Tavoni, 2015. "Directed Technological Change and Energy Efficiency Improvements," Working Papers 2015.78, Fondazione Eni Enrico Mattei.
    8. Grafström, Jonas & Poudineh, Rahmat, 2023. "No evidence of counteracting policy effects on European solar power invention and diffusion," Energy Policy, Elsevier, vol. 172(C).
    9. Aalbers, Rob & Shestalova, Victoria & Kocsis, Viktória, 2013. "Innovation policy for directing technical change in the power sector," Energy Policy, Elsevier, vol. 63(C), pages 1240-1250.
    10. Antoine Dechezleprêtre & Matthieu Glachant, 2014. "Does Foreign Environmental Policy Influence Domestic Innovation? Evidence from the Wind Industry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 58(3), pages 391-413, July.
    11. Joëlle Noailly & Victoria Shestalova, 2013. "Knowledge spillovers from renewable energy technologies, Lessons from patent citations," CPB Discussion Paper 262, CPB Netherlands Bureau for Economic Policy Analysis.
    12. Kristoffer Palage & Robert Lundmark & Patrik Söderholm, 2019. "The innovation effects of renewable energy policies and their interaction: the case of solar photovoltaics," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 21(2), pages 217-254, April.
    13. Kruse, Juergen & Wetzel, Heike, 2016. "Innovation in Clean Coal Technologies: Empirical Evidence from Firm-Level Patent Data," EWI Working Papers 2016-1, Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI).
    14. Fabrizio, Kira R. & Poczter, Sharon & Zelner, Bennet A., 2017. "Does innovation policy attract international competition? Evidence from energy storage," Research Policy, Elsevier, vol. 46(6), pages 1106-1117.
    15. Dechezlepretre, Antoine & Martin, Ralf & Mohnen, Myra, 2014. "Knowledge spillovers from clean and dirty technologies," LSE Research Online Documents on Economics 60501, London School of Economics and Political Science, LSE Library.
    16. Polzin, Friedemann & Egli, Florian & Steffen, Bjarne & Schmidt, Tobias S., 2019. "How do policies mobilize private finance for renewable energy?—A systematic review with an investor perspective," Applied Energy, Elsevier, vol. 236(C), pages 1249-1268.
    17. Subtil Lacerda, Juliana & van den Bergh, Jeroen C.J.M., 2020. "Effectiveness of an ‘open innovation’ approach in renewable energy: Empirical evidence from a survey on solar and wind power," Renewable and Sustainable Energy Reviews, Elsevier, vol. 118(C).
    18. Joelle Noailly & Victoria Shestalova, 2013. "Knowledge Spillovers from Renewable energy Technologies, Lessons from patent citations," CIES Research Paper series 22-2013, Centre for International Environmental Studies, The Graduate Institute.
    19. Amore, Mario Daniele & Bennedsen, Morten, 2016. "Corporate governance and green innovation," Journal of Environmental Economics and Management, Elsevier, vol. 75(C), pages 54-72.
    20. Hille, Erik & Althammer, Wilhelm & Diederich, Henning, 2020. "Environmental regulation and innovation in renewable energy technologies: Does the policy instrument matter?," Technological Forecasting and Social Change, Elsevier, vol. 153(C).

    More about this item

    Keywords

    climate change; climate finance; estimation; public intervention; regression;
    All these keywords.

    JEL classification:

    • F30 - International Economics - - International Finance - - - General
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oec:envaaa:123-en. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/enoecfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.