Energy Policies and Directed Technical Change : How Governments Incentivize Firms to Invests in Renewable Energy innovation

Sammanfattning: Policies are regarded as the most important instrument in redirecting invention Policies are regarded as the most important instrument in redirecting invention investments away from fossil fuel technologies towards renewable energy technologies. Despite the importance and urgency in decarbonizing the economy, the literature on how different energy policies effect the development of renewable energy technologies is relatively scarce. A difficulty has been in justifying the operationalizing of policies in as both valid and reliable. This thesis tackles the operationalization difficulty and produces empirical evidence in how effective various policies are in incentivizing the development of renewable energy technologies (RET). The main findings are that government R&D expenditure increases firm innovation across all RET, demand-pull policies either increase the likelihood of firm inventions or has an insignificant effect and carbon taxation does not increase the likelihood of RET invention.