Environmental and Resource Economics

, Volume 45, Issue 1, pp 133-155

First online:

Renewable Energy Policies and Technological Innovation: Evidence Based on Patent Counts

  • Nick JohnstoneAffiliated withEmpirical Policy Analysis Unit, OECD Environment Directorate Email author 
  • , Ivan HaščičAffiliated withEmpirical Policy Analysis Unit, OECD Environment Directorate
  • , David PoppAffiliated withThe Maxwell School, Syracuse UniversityNBER

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This paper examines the effect of environmental policies on technological innovation in the specific case of renewable energy. The analysis is conducted using patent data on a panel of 25 countries over the period 1978–2003. We find that public policy plays a significant role in determining patent applications. Different types of policy instruments are effective for different renewable energy sources. Broad-based policies, such as tradable energy certificates, are more likely to induce innovation on technologies that are close to competitive with fossil fuels. More targeted subsidies, such as feed-in tariffs, are needed to induce innovation on more costly energy technologies, such as solar power.


Environmental policy Innovation Patents Renewable energy Technological change

JEL Classifcation

Q55 Q58 O34 O38