Clean technology R&D and innovation in emerging countries—Experience from China

This paper touches upon two key issues related to clean technology deployment in emerging countries: what is the life cycle of R&D and innovation? And where does the R&D funding come from? The paper holds that the innovation climate, system and process in emerging countries do not follow the same trajectory as those in developed countries. Crafting an innovation model that is adapted to the needs and conditions of emerging countries thus is critical. Through revealing the four phases of an innovation life cycle in emerging countries, the paper highlights the dominant role of the public sector in clean technology R&D.     

Real options valuation of fusion energy R&D programme

This paper aims to perform a real options valuation of fusion energy R&D programme. Strategic value of thermonuclear fusion technology is estimated here based on the expected cash flows from construction and operation of fusion power plants and the real options value arising due to managerial flexibility and the underlying uncertainty. First, a basic investment option model of Black–Scholes type is being considered. Then, a fuzzy compound real R&D option model is elaborated, which reflects in a better way the multi-stage nature of the programme and takes into account the imprecision of information as one of the components of the overall programme uncertainty. Two different strategies are compared: “Baseline” corresponding to a relatively moderate pace of fusion research, development, demonstration and deployment activities vs. “Accelerated” strategy, which assumes a rapid demonstration and massive deployment of fusion. The conclusions are drawn from the model calculations regarding the strategic value of fusion energy R&D and the advantages of accelerated development path.     

Measuring the social rate of return to R&D in coal,petroleum and nuclear manufacturing: A study of the OECD countries

This paper estimates the social rate of return to research and development (R&D) in the energy manufacturing industry. Our model tries to quantify the positive contribution that lagged R&D has on total factor productivity (TFP) growth in the manufacturing of coal, petroleum products and nuclear fuel for a number of OECD countries. Using a panel of data from the OECD STAN database we are able to obtain results suggesting that R&D has a positive and significant rate of return that varies for each country.     

Public R&D and commercialization of energy-efficient technology: A case study of Japanese projects

Are public R&D programs really effective in developing innovative technologies? How many technologies developed in these programs have been successfully commercialized? What are the key factors for successful commercialization and diffusion in the market? This paper tries to answer these questions by examining the Japanese experience of public R&D in demand-side energy efficiency, focusing on two major projects conducted in the 1980s and 1990s. It is found that of the 34 technologies developed in the two projects, only seven have been commercialized so far, four of those seven have only a very limited number of installations, and only one has a growing market. The results show that, while public R&D investments have a high risk of failure, they can bring new technologies to the market after a certain lead time. In addition, several factors resulting in the success or failure of commercialization/diffusion are identified, such as long-term R&D support by the government, a marketing strategy to respond to and influence market demand, and combination of R&D and deployment policy.     

Innovation in the energy sector: Lessons learnt from R&D expenditures and patents in selected IEA countries

Long time series of the IEA and international patent offices offer a huge potential for scientific investigations of the energy innovation process. Thus, this paper deals with a broad literature review on innovation drivers and barriers, and an analysis of the knowledge induced by public research and development expenditures (R&D) and patents in the energy sector. The cumulative knowledge stock induced by public R&D expenditures in 14 investigated IEA-countries is 102.3 bn EUR in 2013. Nuclear energy has the largest share of 43.9 bn EUR, followed by energy efficiency accounting for 14.9 bn EUR, fossil fuels with 13.5 bn EUR, and renewable energy with 12.1 bn EUR. A regression analysis indicates a linear relation between the GDP and the cumulative knowledge, with each billion EUR of GDP leading to an additional knowledge of 3.1 mil EUR. However, linearity is not given for single energy technologies. Further, the results show that appropriate public R&D funding for research and development associated with a subsequent promotion of the market diffusion of a niche technology may lead to a breakthrough of the respective technology.     

International energy R&D spillovers and the economics of greenhouse gas atmospheric stabilization

It is now widely recognized that technological change will play a substantial role in reducing GHG emissions without compromising economic growth; hence, any better understanding of the process of technological innovation is likely to increase our knowledge of mitigation possibilities and costs. This paper explores how international knowledge flows affect the dynamics of the domestic R&D sector and the main economic and environmental variables. The analysis is performed using WITCH, a dynamic regional model of the world economy, in which energy-related technological change is endogenous. The focus is on disembodied energy R&D international spillovers. The knowledge pool from which regions draw foreign ideas differs between High Income and Low Income countries. Absorption capacity is also endogenous in the model. The basic questions are as follows. Do knowledge spillovers enhance energy-related technological innovation in different regions of the world? Does the speed of innovation increase? Or do free-riding incentives prevail and international spillovers crowd out domestic R&D efforts? What is the role of domestic absorption capacity and of policies designed to enhance it? Do greenhouse gas stabilization costs drop in the presence of international technological spillovers? The new specification of the WITCH model presented in this paper enables us to answer these questions. Our analysis shows that international knowledge spillovers tend to increase free-riding incentives and decrease the investments in energy R&D. The strongest cuts in energy R&D investments are recorded among High Income countries, where international knowledge flows crowd out domestic R&D efforts. The overall domestic pool of knowledge, and thus total net GHG stabilization costs, remain largely unaffected. International spillovers, however, are also an important policy channel. We therefore analyze the implication of a policy-mix in which climate policy is combined with a technology policy designed to enhance absorption capacity in Low Income countries. Significant positive impacts on the costs of stabilizing GHG concentrations are singled out. Finally, a sensitivity analysis shows that High Income countries are more responsive than Low Income countries to changes in the parameters. Additional empirical research efforts should thus be focused on the former.     

A model-based assessment of the impact of revitalised R&D investments on the European power sector

This paper presents an analysis of the effect of enhanced research and development (R&D) efforts for a set of low-carbon power technologies on the development of the European energy sector. It applies a methodology using the concept of Two-Factor-Learning, which quantitatively links trends in technology cost to both accumulated R&D investments and production volumes. The impacts of the latter on the energy sector are then simulated in a consistent manner with the POLES global energy model. On this basis, it compares the total system costs of an assumed increase in worldwide R&D investments that for the EU are in line with proposals made in its European Strategic Energy Technology Plan to a baseline development. It finds that an increase in research efforts at a global level will contribute to reducing the costs of currently less mature low-carbon technologies, thus accelerating their market entry. When comparing two scenarios that both fulfil the EU's 2020 energy and climate objectives and differing only in their R&D investment levels, the reduced technology costs allow EU support policies for renewables and carbon values to be reduced, and the cumulative (discounted) benefit of the accelerated research efforts is positive in the long term.     

The case for a new energy research,development and promotion policy for the UK

This paper is a critical assessment of the current balance of efforts towards energy research and development (R&D) and the promotion of low-carbon electricity technologies in the UK. We review the UK's main technological options and their estimated cost ranges in the medium term. We contrast the energy R&D spending with the current and expected future cost of renewable promotion policies and point out the high cost of carbon saving through existing renewable promotion arrangements. We also note that liberalisation of the electricity sector has had significant implications for the landscape of energy R&D in the UK. We argue that there is a need for reappraisal of the soundness and balance of the energy R&D and renewable capacity deployment efforts towards new energy technologies. We suggest that the cost-effectiveness of UK deployment policies needs to be more closely analysed as associated costs are non-trivial and expected to rise. We also make a case for considering increasing the current low level of energy R&D expenditure. Much of energy R&D is a public good and we should consider whether the current organisation of R&D effort is fit for purpose. We argue that it is important to build and maintain the research capability in the UK in order to absorb spillovers of technological progress elsewhere in the world. Against this background, the recent signs that an energy R&D renaissance could be underway are therefore positive and welcome.     

中国能源研究与发展(R＆D)投入

能源R＆D投入是能源R＆D计划政策分析研究的一个组成部分。文章研究计算了2000年中国能源R＆D的经费投入。在绝对数量上，我国与发达国家的差距很大，如仅仅为日本的1．8％。文中还分析了国际上政府能源R＆D经费在技术领域投向上的趋势。     

U.S. energy research and development: Declining investment,increasing need,and the feasibility of expansion

Investment in energy research and development in the U.S. is declining despite calls for an enhancement of the nation's capacity for innovation to address environmental, geopolitical, and macroeconomic concerns. We examine investments in research and development in the energy sector, and observe broad-based declines in funding since the mid-1990s. The large reductions in investment by the private sector should be a particular area of concern for policy makers. Multiple measures of patenting activity reveal widespread declines in innovative activity that are correlated with research and development (R&D) investment—notably in the environmentally significant wind and solar areas. Trends in venture capital investment and fuel cell innovation are two promising cases that run counter to the overall trends in the sector. We draw on prior work on the optimal level of energy R&D to identify a range of values which would be adequate to address energy-related concerns. Comparing simple scenarios based on this range to past public R&D programs and industry investment data indicates that a five to ten-fold increase in energy R&D investment is both warranted and feasible.     

R&D status and the performance of domestic firms in China's coal mining industry

Coal use accounts for a very large proportion of electricity production in China. Using a recently developed coarsened exact matching (CEM) technique, this paper examines the impact of research and development (R&D) activities on the performance of firms in China's coal mining industry. Our empirical results reveal that firms in China's coal industry that conduct R&D are more productive and their sales are higher. However, as far as the firm profitability and market shares are concerned, whether or not a firm in China's coal industry conducts R&D makes no difference. We find that foreign direct investment in China's coal mining industry leads to a significant decrease in the market share of domestic firms and its impact on productivity, sales and profitability of domestic firms is insignificant. The empirical results presented in this paper suggest that policies that encourage domestic firms in China's coal mining industries to conduct R&D can increase domestic production thereby reducing reliance on imports. Furthermore, productivity gains arising from R&D activities can also help Chinese mining firms to improve their competitive position in the international market. However, there is a need for restricting foreign direct investment in China's coal mining industry.     

Optimal policy of energy innovation in developing countries: Development of solar PV in Iran

The purpose of this study is to apply managerial economics and methods of decision analysis to study the optimal pattern of innovation activities for development of new energy technologies in developing countries. For this purpose, a model of energy research and development (R&D) planning is developed and it is then linked to a bottom-up energy-systems model. The set of interlinked models provide a comprehensive analytical tool for assessment of energy technologies and innovation planning taking into account the specific conditions of developing countries. An energy-system model is used as a tool for the assessment and prioritization of new energy technologies. Based on the results of the technology assessment model, the optimal R&D resources allocation for new energy technologies is estimated with the help of the R&D planning model. The R&D planning model is based on maximization of the total net present value of resulting R&D benefits taking into account the dynamics of technological progress, knowledge and experience spillovers from advanced economies, technology adoption and R&D constraints. Application of the set of interlinked models is explained through the analysis of the development of solar PV in Iranian electricity supply system and then some important policy insights are concluded.     

A study on making a long-term improvement in the national energy efficiency and GHG control plans by the AHP approach

Owing to the expiration of the national 10-year period plan and the establishment of an efficient energy and resource technology R&D system, the Korean government needs to make a strategic long-term national energy and resource technology R&D plan (NERP) to cope with forthcoming 10-year period. A new NERP aims to improve the energy intensity, reduce the emissions of greenhouse gas within the United Nations framework convention on climate change (UNFCCC), and contribute to the construction of an advanced economic system. We determine the priorities in technology development for the energy efficiency and greenhouse gas control plans (EGCP), which are parts of a new NERP, by using the AHP approach for the first time. We suggest a scientific procedure to determine the priorities in technology development by using AHP.     

Impact of energy technology patents in China: Evidence from a panel cointegration and error correction model

Enhancing energy technology innovation performance, which is widely measured by energy technology patents through energy technology research and development (R&D) activities, is a fundamental way to implement energy conservation and emission abatement. This study analyzes the effects of R&D investment activities, economic growth, and energy price on energy technology patents in 30 provinces of China over the period 1999–2013. Several unit root tests indicate that all the above variables are generated by panel unit root processes, and a panel cointegration model is confirmed among the variables. In order to ensure the consistency of the estimators, the Fully-Modified OLS (FMOLS) method is adopted, and the results indicate that R&D investment activities and economic growth have positive effects on energy technology patents while energy price has a negative effect. However, the panel error correction models indicate that the cointegration relationship helps to promote economic growth, but it reduces R&D investment and energy price in the short term. Therefore, market-oriented measures including financial support and technical transformation policies for the development of low-carbon energy technologies, an effective energy price mechanism, especially the targeted fossil-fuel subsidies and their die away mode are vital in promoting China's energy technology innovation.     

The impact of government subsidies and enterprises’ R&D investment: A panel data study from renewable energy in China

In this research, we aim to understand the influence of government subsidies on enterprises’ research and development (R&D) investment behavior, particularly in China’s renewable energy sector. We are also interested in examining how the attributes of enterprise ownership act as a moderating variable for the relationship between government subsidies and R&D investment behavior. Three classical panel data analysis models including the pooled ordinary least squares (OLS) model, the fixed effect model and the random effect model are employed. We find that government subsidies have a significant crowding out influence on enterprises’ R&D investment behavior and that the influence is further moderated by the attributes of enterprise ownership. Moreover, a panel threshold regression model is used to demonstrate how the influence of government subsidies on enterprises’ R&D investment behavior will change when government subsidies increase. Two thresholds, 0.6% and 10.1%, are identified. We recommend that relevant government departments should motivate enterprise R&D investment behavioral intention by increasing subsidies within a certain range. Different attributes of enterprise ownership should also be considered as part of policy reform and re-structuring relating to government subsidies.     

The effects of expert selection,elicitation design,and R&D assumptions on experts' estimates of the future costs of photovoltaics

Expert elicitations of future energy technology costs can improve energy policy design by explicitly characterizing uncertainty. However, the recent proliferation of expert elicitation studies raises questions about the reliability and comparability of the results. In this paper, we standardize disparate expert elicitation data from five EU and US studies, involving 65 experts, of the future costs of photovoltaics (PV) and evaluate the impact of expert and study characteristics on the elicited metrics. The results for PV suggest that in-person elicitations are associated with more optimistic 2030 PV cost estimates and in some models with a larger range of uncertainty than online elicitations. Unlike in previous results on nuclear power, expert affiliation type and nationality do not affect central estimates. Some specifications suggest that EU experts are more optimistic about breakthroughs, but they are also less confident in that they provide larger ranges of estimates than do US experts. Higher R&D investment is associated with lower future costs. Rather than increasing confidence, high R&D increases uncertainty about future costs, mainly because it improves the base case (low cost) outcomes more than it improves the worst case (high cost) outcomes.     

中国能源研发（R＆D）政策研究概要

该课题主要研究21世纪国内外新形势下的能源R&D的政策问题。主要研究评价能源R&D资源配置与投入,同时研究评价能源R&D计划的从立项到促进R&D成果产业化管理,能源R&D计划管理的政策分析是该研究的又一任务。     

The relationship between energy consumption structure,economic structure and energy intensity in China

This paper investigates the long-run equilibrium relationships, temporal dynamic relationships and causal relationships between energy consumption structure, economic structure and energy intensity in China. Time series variables over the periods from 1980 to 2006 are employed in empirical tests. Cointegration tests suggest that these three variables tend to move together in the long-run. In addition, Granger causality tests indicate that there is a unidirectional causality running from energy intensity to economic structure but not vice versa. Impulse response analysis provides reasonable evidences that one shock of the three variables will cause the periods of destabilized that followed. However, the impact of the energy consumption structure shock on energy intensity and the impact of the economic structure shock on energy consumption structure seem to be rather marginal. The findings have significant implications from the point of view of energy conservation and economic development. In order to decrease energy intensity, Chinese government must continue to reduce the proportion of coal in energy consumption, increase the utilization efficiency of coal and promote the upgrade of economic structure. Furthermore, a full analysis of factors that may relate to energy intensity (e.g. energy consumption structure, economic structure) should be conducted before making energy policies.     

The United States and international climate cooperation: International “pull” versus domestic “push”

The US government is being pressured by both international and domestic influences to re-engage in international climate control. This paper considers whether the international “pull” and the domestic “push” will be strong enough to accomplish this. First, we discuss whether changes in the architecture of the current climate regime might induce the United States to re-engage at the international level. We argue that the United States is unlikely to rejoin any global climate regime that is based on the Kyoto architecture, even if Kyoto were to be “reformed”. Second, we discuss whether domestic political developments might eventually cause the United States to re-engage. We conclude that US re-engagement is likely to require the emergence of a new climate regime that basically extends US regulation to other countries. However, the forging of a unified US climate policy is still in the making. Furthermore, a new regime can gain widespread participation only if the Kyoto countries accept the idea of replacing Kyoto with some alternative architecture, which seems unlikely in the near future.