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The Impacts of Feed-in Tariffs on Innovation: Empirical Evidence from Germany

Author

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  • Christoph Böhringer
  • Alexander Cuntz
  • Dietmar Harhoff
  • Emmanuel Asane Otoo

Abstract

Feed-in tariffs under the Renewable Energy Sources Act, the so-called Erneuerbare-Energien-Gesetz (EEG), have triggered a massive expansion of electricity from renewable energy sources in Germany over the last decade. The increase in non-competitive renewable power generation though went hand in hand with a substantial rise in electricity prices with consumers paying for the renewable energy subsidies. The high cost burden has provoked an intense public debate on the benefits of renewable energy promotion. In this paper, we assess one popular justification for feed-in tariffs, i.e., induced innovation as a positive spillover externality. Based on regressions with a time-technology fixed effect negative binomial model, we find that innovation impacts of feed-in tariffs under the EEG are insignificant.

Suggested Citation

  • Christoph Böhringer & Alexander Cuntz & Dietmar Harhoff & Emmanuel Asane Otoo, 2014. "The Impacts of Feed-in Tariffs on Innovation: Empirical Evidence from Germany," CESifo Working Paper Series 4680, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4680
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    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp4680.pdf
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    References listed on IDEAS

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    2. 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.
    3. 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.
    4. Blundell, Richard & Griffith, Rachel & Van Reenen, John, 1995. "Dynamic Count Data Models of Technological Innovation," Economic Journal, Royal Economic Society, vol. 105(429), pages 333-344, March.
    5. Wu, Ching-Yan & Mathews, John A., 2012. "Knowledge flows in the solar photovoltaic industry: Insights from patenting by Taiwan, Korea, and China," Research Policy, Elsevier, vol. 41(3), pages 524-540.
    6. Peters, Michael & Schneider, Malte & Griesshaber, Tobias & Hoffmann, Volker H., 2012. "The impact of technology-push and demand-pull policies on technical change – Does the locus of policies matter?," Research Policy, Elsevier, vol. 41(8), pages 1296-1308.
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    Citations

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    Cited by:

    1. Arthur Korus, 2016. "Erneuerbare Energien und Leitmärkte in der EU und Deutschland," EIIW Discussion paper disbei225, Universitätsbibliothek Wuppertal, University Library.
    2. Guillaume Bourgeois & Sandrine Mathy & Philippe Menanteau, 2017. "The effect of climate policies on renewable energies : a review of econometric studies
      [L’effet des politiques climatiques sur les énergies renouvelables : une revue des études économétriques]
      ," Post-Print hal-01585906, HAL.
    3. Cantner, Uwe & Graf, Holger & Herrmann, Johannes & Kalthaus, Martin, 2016. "Inventor networks in renewable energies: The influence of the policy mix in Germany," Research Policy, Elsevier, vol. 45(6), pages 1165-1184.
    4. Mark A. Andor, Manuel Frondel, and Colin Vance, 2017. "Germanys Energiewende: A Tale of Increasing Costs and Decreasing Willingness-To-Pay," The Energy Journal, International Association for Energy Economics, vol. 0(KAPSARC S).
    5. Rexhäuser, Sascha & Löschel, Andreas, 2015. "Invention in energy technologies: Comparing energy efficiency and renewable energy inventions at the firm level," Energy Policy, Elsevier, vol. 83(C), pages 206-217.

    More about this item

    Keywords

    renewable energy promotion; feed-in tariffs; innovation; negative binomial regression;

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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