Essays on Energy Technology Innovation Policy
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CitationChan, Gabriel Angelo Sherak. 2015. Essays on Energy Technology Innovation Policy. Doctoral dissertation, Harvard University, Graduate School of Arts & Sciences.
AbstractMotivated by global climate change, enhancing innovation systems for energy technologies is seen as one of the largest public policy challenges of the near future. The role of policy in enhancing energy innovation systems takes several forms: public provision of research and develop funding, facilitating the private sector’s capability to develop new technologies, and creating incentives for private actors to adopt innovative and appropriate technologies. This dissertation explores research questions that span this range of policies to develop insights in how energy technology innovation policy can be reformed in the face of climate change.
The first chapter of this dissertation explores how decision making to allocate public research and development funding could be improved through the integration of expert technology forecasts. I present a framework to evaluate and optimize the U.S. Department of Energy’s research and development portfolio of applied energy projects, accounting for spillovers from technical complimentary and competition for the same market share. This project integrates one of the largest and most comprehensive sets of expert elicitations on energy technologies (Anadón et al., 2014b) in a benefit evaluation framework. This work entailed developing a new method for probability distribution sampling that accommodates the information that can be provided by expert elicitations. The results of this project show that public research and development in energy storage and solar photovoltaic technologies has the greatest marginal returns to economic surplus, but the methodology developed in this chapter is broadly applicable to other public and private R&D-sponsoring organizations.
The second chapter of this dissertation explores how policies to transfer technologies from federally funded research laboratories to commercialization partners, largely private firms, create knowledge spillovers that lead to further innovation. In this chapter, I study the U.S. Department of Energy’s National Laboratories, and provide the first quantitative evidence that technology transfer agreements at the Labs lead to greatly increased rates of innovation spillovers. This chapter also makes a key methodological contribution by introducing a technique to utilize automated text analysis in an empirical matching design that is broadly applicable to other types of social science studies. This work has important implications for how policies should be designed to maximize the social benefits of the $125 billion in annual federal funding allocated to research and development and the extent to which private firms can benefit from technology partnerships with the government.
The final chapter of this dissertation explores the effectiveness of international policy to facilitate the deployment of low-emitting energy technologies in developing countries. Together with Joern Huenteler, I examine wind energy deployment in China supported through international climate finance flows under the Kyoto Protocol’s Clean Development Mechanism. Utilizing a project-level financial model of wind energy projects parameterized with high-resolution observations of Chinese wind speeds, we find that the environmental benefits of projects financed under the Clean Development Mechanism are substantially lower than reported, as many Chinese wind projects would have been built without the Mechanism’s support, and thus do not represent additional clean energy generation.
Together, the essays in this dissertation suggest several limitations of energy technology innovation policy and areas for reform. Public funds for energy research and development could be made more effective if decision making approaches were better grounded in available technical expertise and developed in framework that captures the important interactions of technologies in a research and development portfolio. The first chapter of this dissertation suggests a politically feasible path towards this type of reform.
Policies to “unlock” publicly sponsored inventions from the organizations that develop them have broad impact on private sector innovation. These policies multiply the effect of public research and development funds, but should be strengthened to more rapidly advance the scientific frontier. The second chapter of this dissertation provides some of the first quantitative evidence to support reform in this area.
Finally, international policies to facilitate the deployment of climate-friendly technologies in developing countries face serious implementation challenges. The current paradigm of utilizing carbon markets to fund individual projects that would not have otherwise occurred has failed to encourage energy technology deployment in one of the sectors with the greatest experience with such policies. The third chapter of this dissertation suggests that this failure has been largely due to poorly designed procedural rules, but options for reform are available.
Mitigation of global climate change will require broad policy response across the full range of scales, sectors, and policy spheres. Undoubtedly, climate mitigation will result in widespread transformation of energy systems. This dissertation focuses on the role of innovation policy in accelerating the transformation of these systems. The range of policies studied in this dissertation can make climate change mitigation more politically feasible and more cost effective by expanding the set of technological choices available to public and private actors faced with incentives and requirements to lower their greenhouse gas emissions to collectively safe levels.
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