Transition Towards a Green Economy in Europe: Innovation and Knowledge Integration in the Renewable Energy Sector

Mancusi, Maria Luisa and Conti, Chiara and Sanna-Randaccio, Francesca and Sestini, Roberta (2018): Transition Towards a Green Economy in Europe: Innovation and Knowledge Integration in the Renewable Energy Sector. Published in: Research Policy , Vol. 47, No. 10 (December 2018): pp. 1996-2009.

Abstract

This paper investigates the fragmentation of the EU innovation system in the field of renewable energy sources (RES) by estimating the intensity and direction of knowledge spillovers over the years 1985-2010. We modify the original double exponential knowledge diffusion model proposed by Caballero and Jaffe (1993) to provide information on the degree of integration of EU countries’ RES knowledge bases and to assess how citation patterns changed over time. We show that EU RES inventors have increasingly built “on the shoulders of the other EU giants”, intensifying their citations to other member countries and decreasing those to domestic inventors. Furthermore, the EU strengthened its position as source of RES knowledge for the US. Finally, we show that this pattern is peculiar to RES, with other traditional (i.e. fossil-based) energy technologies and other radically new technologies behaving differently. We provide suggestive, but convincing evidence that such decrease in fragmentation around the turn of the century emerged as a result of the EU increased support for RES taking mainly the form of demand-pull policies.

• Item Type: MPRA Paper
• Language: English
• Keywords: EU integration; renewable energy technologies; knowledge flows
• Subjects: O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O31 - Innovation and Invention: Processes and Incentives; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q42 - Alternative Energy Sources; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q55 - Technological Innovation; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy

References

Aghion, P., Jaravel, X., 2015. Knowledge spillovers, Innovation and growth. The Economic Journal 125, 533–573.

Antonelli C. and Colombelli A., 2017. The locus of knowledge externalities and the cost of knowledge. Regional Studies, 51(8), 1151-1164.

Bacchiocchi, E., Montobbio, F., 2010. International knowledge diffusion and home-bias effect: do USPTO and EPO patent citations tell the same story? The Scandinavian Journal of Economics 112, 441-470.

Balconi, M., Breschi, S., Lissoni, F., 2004. Networks of inventors and the role of academia: an exploration of Italian patent data. Research Policy 33, 127-145.

Bointner, R., Pezzutto S., Sparber W., 2016. Scenarios of public energy research and development expenditures: financing energy innovation in Europe. WIREs Energy Environment 5, 470–488.

Borghesi, S., Crespi, F., D’Amato, A., Mazzanti, M., Silvestri, F., 2015. Carbon abatement, sector heterogeneity and policy responses: evidence on induced eco innovations in the EU. Environmental Science & Policy 54, 377-388.

Bottazzi, L., Peri, G., 2003. Innovation and spillovers in regions: evidence from European patent data. European Economic Review 47, 687-710.

Brahmbahatt, M., Hu, A.G.Z., 2009. Ideas and innovation in East Asia. World Bank Research Observer 25, 177-20.

Caballero, R.J., Jaffe, A.B., 1993. How high are the giants’ shoulders: An empirical assessment of knowledge spillovers and creative destruction in a model of economic growth. NBER Macroeconomics Annual 1993, vol.8.

Cantner, U., Graf, H., Herrmann, J., Kalthaus, M., 2016. Inventor networks in renewable energies: the influence of the policy mix in Germany. Research Policy. 45, 1165-1184.

Carrara, S., Marangoni, G., 2017. Including system integration of variable renewable energies in a constant elasticity of substitution framework: The case of the WITCH model. Energy Economics 64, 612–626.

Cassiman, B., Veugelers, R., 2006. In search of complementarity in innovation strategy: internal R&D and external knowledge acquisition. Management Science 52, 68-82.

Cohen, W.M., Levinthal, D.A., 1989. Innovation and learning: the two faces of R&D. The Economic Journal 99, 569–596.

Corsatea, T.D., 2014. Technological capabilities for innovation activities across Europe: evidence from wind, solar and bioenergy technologies. Renewable and Sustainable Energy Reviews 37, 469-479.

(the) Council of the European Communities, 1986. “Resolution of 16 September 1986 concerning new Community energy policy objectives for 1995 and convergence of the policies of the Member States, Official Journal of the European Communities No C 241/1 (86/C 241/01).

De Bondt, R., Slaets, P., Cassiman, B., 1992. The degree of spillovers and the number of rivals for maximum effective R&D. International Journal of Industrial Organization 10, 35-54.

De Bondt, R., 1996. Spillovers and innovative activities. International Journal of Industrial Organization 15, 1-28.

Dechezleprêtre, A., Glachant, M., Ménière, Y., 2013. What drives the international transfer of climate change mitigation technologies? Empirical evidence from patent data. Environmental and Resource Economics 54, 161-178.

Dechezleprêtre, A., Martin, R., Mohnen, M., 2014. Knowledge spillovers from clean and dirty technologies. CEP Discussion Paper No. 1300, Centre for Economic Performance, LSE, London.

Drivas, K., Economidou, C., Karkalakos, S., Tsionas, E.G., 2016. Mobility of knowledge and local innovation activity. European Economic Review 85, 39-61.

Duguet, E., MacGarvie, M., 2005. How well do patent citations measure flows of technology? Evidence from French Innovation Survey. Economics of Innovation and New Technology 14, 375-393.

EC (European Commission), 1997. Energy for the future: Renewable sources of energy. White Paper for a community strategy and action plan. COM(97) 599 final.

EC (European Commission), 2000. Green Paper - Towards a European strategy for the security of energy supply. COM(2000) 0769 final.

EC (European Commission), 2006a. Green Paper - A European strategy for sustainable, competitive and secure energy. COM(2006) 105 final.

EC (European Commission), 2006b. Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions. Towards a European Strategic Energy Technology Plan. COM(2006) 847 final

EC (European Commission), 2007. A European Strategic Energy Technology Plan (SET-Plan). COM(2007) 723 final.

EC (European Commission), 2010. Europe 2020 Flagship Initiative Innovation Union. COM(2010) 1161 final.

EC (European Commission), 2014. Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: Research and innovation as sources of renewed growth. COM(2014) 339 final.

EC (European Commission), 2013. Communication from the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: Energy Technologies and Innovation. COM(2013) 253 final.

EC (European Commission), 2015a. A Framework strategy for a resilient Energy Union with a forward-looking climate policy. COM(2015) 80 final.

EC (European Commission), 2015b. Towards an Integrated Strategic Energy Technology (SET) Plan: Accelerating the European energy system transformation. COM(2015) 6317 final.

EEA (European Environmental Agency), 2012. Greenhouse gas emission trends and projections in Europe 2012 – Tracking progress towards Kyoto and 2020 targets. EEA Report 6/2012, Copenhagen.

EEA (European Environmental Agency), 2016. Renewable energy in Europe 2016 – Recent growth and knock-on effects. EEA Report 4/2016, Copenhagen.

Fischer, M.M., Scherngell, T., Jansenberger, E., 2009. Geographic localization of knowledge spillovers: evidence from high-tech patent citations in Europe. The Annals of Regional Science 43, 839-858.

Garrone, P., Grilli, L., 2010. Is there a relationship between public expenditure in energy R&D and carbon emission per GDP? An empirical investigation. Energy Policy 38, 5600–5613.

Grafström, J., 2017. International knowledge spillovers in the wind power industry: evidence from the European Union. Economics of Innovation and New Technology 27, 205-224.

Griliches, Z., 1990. Patent statistics as economic indicators: a survey. Journal of Economic Literature 28, 1661-1707.

Harhoff, D., Scherer, F.M., Vopel, K., 2003. Citations, family size, opposition and the value of patent rights. Research Policy 32, 1343-1363.

HEAL (Health and Enviroment Alliance), 2013. The unpaid bill. How coal power plants make us sick. Available at www.env-health.org/unpaidhealthbill.

Hu, A.G.Z., 2009. The regionalization of knowledge flows in East Asia: evidence from patent citations data. World Development 37, 1465-1477.

Hu, A.G.Z., Jaffe, A.B., 2003, Patent citations and international knowledge flow: the cases of Korea and Taiwan. International Journal of Industrial Organization 21, 849-880.

IEA (International Energy Agency), 2015a. World Energy Outlook 2015. OECD/IEA, Paris.

IEA (International Energy Agency), 2015b. Energy and Climate Change: World Energy Outlook Special Report. OECD/IEA, Paris.

IEA (International Energy Agency), 2015c. World Economic Outlook – Policy Databases, http:/www.worldenergyoutlook.org/weomodel/policydatabases.

Jaffe, A.B., Fogarty, M.S., Banks, B.A., 1998. Evidence from patents and patent citations on the impact of NASA and other federal labs on commercial innovation. Journal of Industrial Economics 46, 183-205.

Jaffe, A.B., Newell, R.G. Stavins, R.N., 2005. A tale of two market failures: technology and environmental policy. Ecological Economics 54, 164–174.

Jaffe, A.B, Trajtenberg, M., Henderson, R., 1993. Geographic localization of knowledge spillovers as evidenced by patent citations. Quarterly Journal of Economics 108, 577-598.

Jaffe, A.B., Trajtenberg, M., 1996. Flows of knowledge from universities and federal laboratories: modeling the flow of patent citations over time and across institutional and geographic boundaries. NBER Working Paper n. 5712, National Bureau of Economic Research, Cambridge MA.

Jaffe, A.B., Trajtenberg, M., 1999. International knowledge flows: evidence from patent citations. Economics of Innovation and New Technologies 8, 105-136.

Johnstone, N., Hascic, I., Popp, D., 2010. Renewable energy policies and technological innovation: evidence based on patent count. Environmental and Resource Economics 45, 133-155.

Lanzi, E., Verdolini, E., Haščič, I., 2011. Efficiency-improving fossil fuel technologies for electricity generation: data selection and trends. Energy Policy 39, 7000-7014.

Lee, G., 2006. The Effectiveness of International Knowledge Spillover Channels. European Economic Review 50, 2075-2088.

LeSage, J.P., Fischer, M.M., Scherngell, T., 2007. Knowledge spillovers across Europe: evidence from a Poisson spatial interaction model with spatial effects. Papers in Regional Science 86, 393-421.

Levin, R.C., Reiss, P.C., 1988. Cost-reducing and demand creating R&D with spillovers. Rand Journal of Economics 19, 538–556.

Mancusi, M.L., 2008. International spillovers and absorptive capacity: a cross-country cross-sector analysis based on patents and citations. Journal of International Economics 76, 155-165.

Maurseth, P.B., Verspagen, B., 2002. Knowledge spillovers in Europe: a patent citations analysis. The Scandinavian Journal of Economics 104, 531-545.

Nicolli, F., Vona, F., 2016. Heterogeneous policies, heterogeneous technologies: the case of renewable energy. Energy Economics 56, 190-204.

Noailly, J., Shestalova, V., 2017. Knowledge spillovers from renewable energy technologies: lessons from patent citations. Environmental Innovation and Societal Transitions 22, 1-14.

OECD, 2012. Energy and climate policy. Bending the technological trajectory. OECD Studies in Environmental Innovation, Paris.

Park, W.G., 1998. A theoretical model of government research and growth. Journal of Economic Behavior & Organization 34, 69–85.

Peri, G., 2005. Determinants of knowledge flows and their effect on innovation. Review of economics and Statistics 87, 308-322.

Pillu, H., Koléda, G., 2011. Determinants of innovation in efficient and renewable energy technologies. Economie & prévision 197-198, 105-128.

Popp, D., 2005. Lessons from patents: Using patents to measure technological change in environmental models. Ecological Economics 54, 209–226.

Popp D., 2006. International innovation and diffusion of air pollution technologies: the effects of NOx and SO2 regulation in the US, Japan and Germany. Journal of Environmental Economics and Management 51, 46-71.

Rossetti di Valdalbero D., 2010. The Power of Science: Economic Research and European Decision-Making: The Case of Energy and Environment Policies. Peter Lang Pub Inc.

Ruester, S., Schwenen, S., Finger, M., Glachant, J.M., 2014. A post-2020 EU energy technology policy: revisiting the strategic energy technology plan. Energy Policy 66, 209-2017.

Sung, H.Y., Wang, C.C., Chen, D.Z., Huang, M.H., 2014. A comparative study of patent counts by the inventor country and the assignee country. Scientometrics 100, 577-593.

Takase, K., Suzuki, T., 2011. The Japanese energy sector: current situation, and future paths. Energy Policy 39, 6731-6744.

Verdolini, E., Bosetti, V., 2017. Environmental policy and the international diffusion of cleaner energy tecnologies. Environmental and Resource Economics 66, 497-536.

Verdolini, E., Galeotti, M., 2011. At home and abroad: an empirical analysis of innovation and diffusion in energy technologies. Journal of Environmental Economics and Management 61, 119-134.

Verdolini, E., Vona, F., Popp, D., 2018. Bridging the gap: do fast reacting fossil technologies facilitate renewable energy diffusion? Energy Policy 116, 242–256.

Wu, C., Mathews, J.A., 2012, Knowledge flows in the solar photovoltaic industry: Insights from patenting by Taiwan, Korea, and China, Research Policy, 41, 524-540.