Energy subsidies, structure of electricity prices and technological change of energy use
AbstractThis paper addresses the impact of the structure of energy prices on technological change in renewable energy sources. It operates on two fields of research that are often not related to each other. Firstly, the increasing interest in environmental economics for the determinants of green technological change, and secondly the impact of government policies aimed at subsidizing energy prices. Recent research claims a positive relationship between energy prices and the number of patents in the fields of energy efficiency. This paper extends this research by investigating the impact of the price structure of electricity on patent counts in 1) renewable energy sources, 2) wind energy and 3) solar power. In nearly all OECD countries in the period 1990–2006 industrial energy users pay a lower price per energy unit than households due, among others, to government subsidy policies. The empirical results show that reducing government subsidies and hence increasing the electricity price of (large) industrial electricity users relative to the price paid by (small) residential users provides a clear incentive to increase inventions as measured by number of patents in the technical fields of solar and wind energy. These results are an important input in the debate on reducing government support to large energy users.
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Bibliographic InfoArticle provided by Elsevier in its journal Energy Economics.
Volume (Year): 40 (2013)
Issue (Month): C ()
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Web page: http://www.elsevier.com/locate/eneco
Induced innovation; Energy prices; Subsidies; Patents;
Find related papers by JEL classification:
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- O31 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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