This paper empirically investigates the effects of environmental policy, institutions, political orientation, and lobbying on energy innovation. In this FEEM Working Paper, FEEM researchers S. Dasgupta, E. De Cian and E. Verdolini find that political economy factors significantly affect the incentives to innovate and create cleaner energy efficient technologies.
“Our results suggest that all political economy and institutional factors considered affect the incentive to invest in energy R&D and to create new clean and energy-efficient technologies.  The implication is that, in order to foster the transition towards a greener economy, countries should combine stringent environmental regulations with a general improvement of institutions and governance effectiveness.”


Suggested citation: Dasgupta, S., E. De Cian, E. Verdolini, (2016), ‘The Political Economy of Energy Innovation’, Nota di Lavoro 35.2016, Milan, Italy: Fondazione Eni Enrico Mattei.
Previously published as: Dasgupta, S., De Cian, E. & Verdolini, E. (2016) The political economy of energy innovation. 2016/17. Helsinki: UNU-WIDER. Forthcoming as a chapter in ‘The Political Economy of  Clean Energy Transitions’, Oxford University Press.