Working PaperEnergyFinance

Galvanising low-carbon innovation

Jason Eis, Russell Bishop, Philip Gradwell

Innovation is a fundamental engine of long-term economic growth, and a critical driver for reducing emissions and tackling climate risk. There is a need to scale up innovation efforts to reduce emissions cost-effectively beyond 2030 consistent with limiting dangerous climate change, in particular through supporting research, development and demonstration (RD&D) for technologies which have not yet been deployed at scale and are unlikely to without strong government support.

Authors

Jason Eis Vivid Economics

Russell Bishop New Climate Economy

Philip Gradwell Vivid Economics

Overview

October 2016

Innovation is a fundamental engine of long-term economic growth, and a critical driver for reducing emissions and tackling climate risk. There is a need to scale up innovation efforts to reduce emissions cost-effectively beyond 2030 consistent with limiting dangerous climate change, in particular through supporting research, development and demonstration (RD&D) for technologies which have not yet been deployed at scale and are unlikely to without strong government support. While private sector investment in innovation is significant for nearer-to-market technologies, private and public RD&D for low-carbon solutions remains low – around 0.03–0.04% of GDP in International Energy Agency (IEA) member countries is devoted to public RD&D for low-carbon energy.