American Economic Review: Insights
ISSN 2640-205X (Print) | ISSN 2640-2068 (Online)
Induced Innovation, Inventors, and the Energy Transition
American Economic Review: Insights
vol. 7,
no. 1, March 2025
(pp. 90–106)
Abstract
We study how individual inventors respond to incentives to work on "clean" electricity technologies. Using natural gas price variation, we estimate output and entry elasticities of inventors and measure the medium-term impacts of a price increase mirroring the social cost of carbon. We find that the induced clean innovation response primarily comes from existing clean inventors. New inventors are less responsive on the margin than their average contribution to clean energy patenting would indicate. Our results strengthen the rationale for government intervention to expedite the energy transition.Citation
Dugoua, Eugenie, and Todd D. Gerarden. 2025. "Induced Innovation, Inventors, and the Energy Transition." American Economic Review: Insights 7 (1): 90–106. DOI: 10.1257/aeri.20230522Additional Materials
JEL Classification
- L94 Electric Utilities
- O31 Innovation and Invention: Processes and Incentives
- O34 Intellectual Property and Intellectual Capital
- Q35 Hydrocarbon Resources
- Q42 Alternative Energy Sources
- Q55 Environmental Economics: Technological Innovation