Policy mix characteristics and low carbon innovation

A new paper written by Centre on Innovation and Energy Demand researcher Dr Karoline Rogge and Fraunhofer ISI colleague Joachim Schleich shows that there is a positive link between the consistency and credibility of the climate policy mix and low carbon innovation.

The paper, published in Research Policy, examines the link between green innovation in renewable power generation technologies and four different characteristics of the policy mix: consistency, credibility, comprehensiveness and coherence. While the first two policy mix characteristics matter for low carbon innovation, the analysis found no sufficient evidence for a direct link between policy mix coherence and innovation; or between comprehensiveness and innovation.

The results of the research imply that technology providers that consider government policies to be well aligned with the expansion targets for renewable electricity and which perceive a high level of commitment from government towards achieving these targets spend more on low-carbon innovation.

The researchers recommend that policy makers should think more holistically in terms of the consistency of the policy mix, if they are interested in stimulating green innovation and also understand what shapes the credibility of their policy mixes. They also suggests that it is time to rethink the consideration of policies and low carbon innovation in official innovation data collection, such as through standard innovation surveys, so as to improve the evidence base for government policies promoting green innovation.

The study draws on environmental economics, innovation studies and policy sciences and uses the case study of the German electricity transition, the so-called Energiewende. It builds on a unique data set, which included novel questions measuring companies’ perceptions of the climate policy mix.

 

Read the full article.

Find out more about our project on ‘Policy synergies and trade offs for low energy innovation’.