The empirics of enabling investment and innovation in renewable energy


OECD Environment Working Papers

This series is designed to make available to a wider readership selected studies on environmental issues prepared for use within the OECD. Authorship is usually collective, but principal authors are named. The papers are generally available only in their original language English or French with a summary in the other if available.


English


The empirics of enabling investment and innovation in renewable energy

This working paper undertakes econometric analysis to assess the impacts of climate mitigation policies and the quality of the investment environment on investment and innovation in renewable power in OECD and G20 countries. It also assesses how countries’ investment environments interact with climate mitigation policies to influence investment and patent activity in renewable power. The paper gathered and tested data across OECD and G20 countries on more than 70 explanatory variables, which were analysed using two Poisson-family regression models: one to investigate determinants of investment flows in renewable power from 2000 until 2014; and one to investigate determinants of patent counts in renewable-power technologies from 2000 until 2012. Results of the econometric analysis are consistent with the main hypothesis in this paper that beyond setting climate mitigation policies, policy makers need to strengthen the general investment environment and align it with climate mitigation policies in order to mobilise investment and innovation in renewable power across OECD and G20 countries.


English

Keywords: regression, climate change, public intervention, estimation, climate finance

JEL:
Q55: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: Technological Innovation;
O3: Economic Development, Innovation, Technological Change, and Growth / Innovation; Research and Development; Technological Change; Intellectual Property Rights;
L94: Industrial Organization / Industry Studies: Transportation and Utilities / Electric Utilities;
Q58: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Environmental Economics: Government Policy;
F30: International Economics / International Finance / International Finance: General;
Q42: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Alternative Energy Sources;
Q54: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Environmental Economics / Climate; Natural Disasters and Their Management; Global Warming;
Q48: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Energy / Energy: Government Policy;
H23: Public Economics / Taxation, Subsidies, and Revenue / Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies