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The optimal time path of clean energy R&D policy when patents have finite lifetime

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  • Gerlagh, Reyer
  • Kverndokk, Snorre
  • Rosendahl, Knut Einar

Abstract

We study the optimal time path for clean energy innovation policy. In a model with emission reduction through clean energy deployment, and with R&D increasing the overall productivity of clean energy, we describe optimal R&D policies jointly with emission pricing policies. We find that while emission prices can be set at the Pigouvian level independently of innovation policy, the optimal level of R&D subsidies and patent lifetime change with the stages of the climate problem. In the early stages of clean energy development, innovators find it more difficult to capture the social value of their innovations. Thus, for a given finite patent lifetime, optimal clean energy R&D subsidies are initially high, but then fall over time. Alternatively, if research subsidies are kept constant, the optimal patent lifetime should initially be long and fall over time.

Suggested Citation

  • Gerlagh, Reyer & Kverndokk, Snorre & Rosendahl, Knut Einar, 2014. "The optimal time path of clean energy R&D policy when patents have finite lifetime," Journal of Environmental Economics and Management, Elsevier, vol. 67(1), pages 2-19.
  • Handle: RePEc:eee:jeeman:v:67:y:2014:i:1:p:2-19
    DOI: 10.1016/j.jeem.2013.09.005
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    Cited by:

    1. Elizabeth Baldwin, Yongyang Cai, Karlygash Kuralbayeva, 2018. "To build or not to build? Capital stocks and climate policy," GRI Working Papers 290, Grantham Research Institute on Climate Change and the Environment.
    2. Sjak Smulders & Michael Toman & Cees Withagen, 2014. "Growth theory and ‘green growth’," Oxford Review of Economic Policy, Oxford University Press, vol. 30(3), pages 423-446.
    3. Slim Ben Youssef, 2015. "Timing of Adoption of Clean Technologies by Regulated Monopolies," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(1), pages 77-92, March.
    4. repec:eee:rensus:v:95:y:2018:i:c:p:328-340 is not listed on IDEAS
    5. Langinier, Corinne & Ray Chaudhuri, Amrita, 2018. "Green Technology and Patents in the Presence of Green Consumers," Working Papers 2018-15, University of Alberta, Department of Economics.
    6. Fischer, Carolyn & Greaker, Mads & Rosendahl, Knut Einar, 2018. "Strategic technology policy as a supplement to renewable energy standards," Resource and Energy Economics, Elsevier, vol. 51(C), pages 84-98.
    7. repec:eee:enepol:v:120:y:2018:i:c:p:73-84 is not listed on IDEAS
    8. Corradini, Massimiliano & Costantini, Valeria & Markandya, Anil & Paglialunga, Elena & Sforna, Giorgia, 2018. "A dynamic assessment of instrument interaction and timing alternatives in the EU low-carbon policy mix design," Energy Policy, Elsevier, vol. 120(C), pages 73-84.
    9. Hémous, David, 2016. "The dynamic impact of unilateral environmental policies," Journal of International Economics, Elsevier, vol. 103(C), pages 80-95.
    10. Jean Charles Hourcade & Michel Aglietta & B Perrissin-Fabert, 2014. "Transition to a Low-Carbon society and sustainable economic recovery, a monetary-based financial device," Post-Print hal-01692593, HAL.
    11. Massimiliano Corradini & Valeria Costantini & Anil Markandya & Elena Paglialunga & Giorgia Sforna, 2018. "Some reflections on policy mix in the EU low-carbon strategy," Departmental Working Papers of Economics - University 'Roma Tre' 0236, Department of Economics - University Roma Tre.
    12. Lecuyer, Oskar & Vogt-Schilb, Adrien, 2014. "Optimal transition from coal to gas and renewable power under capacity constraints and adjustment costs," Policy Research Working Paper Series 6985, The World Bank.
    13. Elizabeth Baldwin & Yongyang Cai & Karlygash Kuralbayeva, 2018. "To Build or not to Build? Capital Stocks and Climate Policy," OxCarre Working Papers 204, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
    14. repec:spr:envpol:v:20:y:2018:i:4:d:10.1007_s10018-018-0214-0 is not listed on IDEAS
    15. repec:eee:ecmode:v:68:y:2018:i:c:p:461-474 is not listed on IDEAS
    16. Schroyen, Fred & Durmaz, Tunc, 2013. "Evaluating Carbon Capture and Storage in a Climate Model with Endogenous Technical Change," Discussion Paper Series in Economics 22/2019, Norwegian School of Economics, Department of Economics, revised 16 Oct 2019.
    17. Oskar Lecuyer & Adrien Vogt-Schilb, 2014. "Optimal Transition from Coal to Gas and Renewable Power under Capacity Constraints and Adjustment Costs," Working Papers hal-01057241, HAL.
    18. repec:kap:enreec:v:73:y:2019:i:2:d:10.1007_s10640-018-0274-4 is not listed on IDEAS

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