Earth Day Research: Powering the Future with Clean Energy

Clean energy innovation is vital to combat climate change and drive the transition from fossil fuels to sustainable electricity generation. According to new research from SC Johnson College of Business, while economic incentives influence tech advances, the primary contributors to recent clean energy patents are existing inventors rather than newcomers.

In the paper “Induced Innovation, Inventors, and the Energy Transition,” which published in the March  2025 issue of American Economic Review: Insights, Todd Gerarden, assistant professor at the Dyson School of Applied Economics and Management, and his co-author Eugenie Dugoua, assistant professor at the London School of Economics, explore how energy prices, market forces, and government interventions shape innovation in clean electricity technologies.

Gerarden and Dugoua analyzed nearly all electricity technology patent applications worldwide over the past three decades. Over that time, there was a large boom in the number of individual inventors and patents in renewable and nuclear energy technologies. The authors focus on how changes in natural gas prices in different countries affect the number of inventors working on clean technology and the number of patents they produce.

Researchers determined that, over the past three decades, advances in clean energy technology have been driven roughly equally by established inventors and new entrants. However, their analysis reveals important differences in how these two groups respond to economic incentives. Experienced inventors already active in clean technologies significantly intensify their innovation efforts when fossil fuel prices rise, as higher prices make renewables and nuclear energy more competitive. In contrast, new inventors, despite their crucial contributions to clean innovation, respond more slowly due to the substantial training and resources required to build expertise in specialized energy technologies.

Gerarden and Dugoua also highlight that inventors from fossil fuel-based sectors rarely shift into clean energy patenting, suggesting significant barriers prevent cross-sector movement. These barriers may include differences in the skills required in different sectors, the effects of industry networks, and uncertainty in market demand, factors that have not been adequately addressed by current green innovation policies.

“Our findings underscore the critical role that economic incentives, especially fossil fuel prices, play in shaping clean energy innovation,” said Gerarden. “They also highlight the importance of encouraging inventors to work on clean energy through other means. Policy discussions regarding the energy transition have primarily focused on environmental regulation of fossil fuels or subsidies to adopt renewable energy, while technology innovation has received relatively less attention. Accelerating the transition toward a cleaner energy future requires a balanced mix of policies.”

Given the relatively slow response of new inventors and limited movement of existing inventors across sectors, Gerarden highlights several policy strategies that could foster more clean energy innovation:

• Traditional Environmental Policy: Raising the cost of carbon-intensive fuels through carbon pricing or environmental regulation makes clean technologies more economically attractive, providing a stronger incentive for inventors to devise new and improved technologies.
• Targeted Research and Development Subsidies: Financial support for clean energy research can help overcome barriers faced by new inventors and amplify innovation by established researchers.
• Training Programs: Investing in education and workforce development can broaden the pool of inventors equipped to enter and contribute meaningfully to clean-energy innovation.
• Public-Private Partnerships: Facilitating collaboration among governments, universities, and industry stakeholders can catalyze breakthroughs and accelerate the commercialization of renewable energy technologies.

To successfully transition to a clean energy economy, policymakers must support both established and new inventors. By combining market-based environmental policy with targeted government policies to encourage innovation, the world can foster a more rapid and effective shift toward sustainable energy solutions.