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Uncertainty and Innovation in Renewable Energy

Author

Listed:
  • Bettarelli, Luca
  • Furceri, Davide
  • Pizzuto, Pietro
  • Shakoor, Nadia

Abstract

This paper empirically investigates the impact of economic and policy uncertainty on green innovation for a sample of 81 advanced and emerging market economies during the period 1976-2020. Our results show that increases in uncertainty lead to a long-lasting decrease in green innovation, measured by the number of new green energy patents. This effect holds for a wide set of technologies, it is larger during recessions and periods of higher financial stress, and in countries with less stringent environment protection regulations. Importantly, the effect of uncertainty on green patents is larger than on non-green patents. Results are robust to several sensitivity tests, including an instrumental variable approach and a difference-in-differences strategy.

Suggested Citation

  • Bettarelli, Luca & Furceri, Davide & Pizzuto, Pietro & Shakoor, Nadia, 2024. "Uncertainty and Innovation in Renewable Energy," CEPR Discussion Papers 19540, Centre for Economic Policy Research.
    • Handle: RePEc:cpr:ceprdp:19540
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    1. is not listed on IDEAS
    2. Bettarelli, Luca & Furceri, Davide & Pizzuto, Pietro & Shakoor, Nadia, 2025. "Do climate policies affect green patenting patterns?," Energy Economics, Elsevier, vol. 150(C).
    3. Guerini, Mattia & Marin, Giovanni & Vona, Francesco, 2025. "Can easing financial constraints reduce carbon emissions? evidence from a large sample of French companies," LSE Research Online Documents on Economics 137115, London School of Economics and Political Science, LSE Library.
    4. Mattia Guerini & Giovanni Marin & Francesco Vona, 2025. "Easing Financial Constraints Reduce Carbon Emissions? Evidence from a Large Sample of French Companies," Working Papers 2025.31, Fondazione Eni Enrico Mattei.
    5. João Bento & Miguel Matos Torres & Hicham Nachit, 2026. "Income Inequality, US MNEs and Green Technology Innovation: Evidence from OECD," LIS Working papers 914, LIS Cross-National Data Center in Luxembourg.
    6. Eugenie Dugoua & Jacob Moscona, 2025. "The Economics of Climate Innovation: Technology, Climate Policy, and the Clean Energy Transition," CESifo Working Paper Series 12267, CESifo.
    7. Eugenie Dugoua & Jacob Moscona, 2025. "The Economics of climate innovation: technology, climate policy, and the clean energy transition," CEP Discussion Papers dp2135, Centre for Economic Performance, LSE.

    More about this item

    Keywords

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    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives

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