2022 journal article
Biofuels policy and innovation impacts: Evidence from biofuels and agricultural patent indicators
ENERGY POLICY, 162.
author keywords: Biofuels; Patenting; Biotechnology; Bayesian model averaging
open access via ageconsearch.umn.edu (repository)
UN Sustainable Development Goal Categories
7. Affordable and Clean Energy
(Web of Science)
8. Decent Work and Economic Growth
(Web of Science)
9. Industry, Innovation and Infrastructure
(Web of Science)
12. Responsible Consumption and Production
(Web of Science)
13. Climate Action
(Web of Science)
Source: Web Of Science
Added: January 31, 2022
In the early 2000s, governments implemented policies stimulating the use of ethanol and biodiesel to reduce carbon emissions and encourage domestic energy production. Blend mandates requiring gasoline or diesel to contain a minimum percentage of these biofuels were a favored policy instrument. Theoretical work by Clancy and Moschini (2017) concluded that, if innovation were stimulated by mandates, then the socially optimal mandate would be higher than if innovation were not possible. We test the impact of blend mandates and other biofuels policies on innovation using measures of patenting activity that correspond with research effort and research output. Our analysis shows that ethanol blend mandates significantly increased both R&D effort and quality-weighted innovation output in biofuels technologies while reducing the R&D inputs to plant technologies. This suggests that biofuels innovation increased in response to the policies, with firms substituting some R&D effort away from plant technologies research. Despite decreased R&D effort, output of plant innovation held steady as effort shifted to biofuels, supporting the presence of a spillover effect between biofuels innovation and plant innovation. We find that biodiesel blend mandates did not significantly impact R&D efforts in either plant or biofuels technologies. Furthermore, policies other than blend mandates had varying effects, ranging from limited increases in R&D activity to significant decreases in innovation. JEL Codes: O31, O38, Q16, Q48, Q55. • Ethanol blend mandates influenced patenting in biofuels and plant categories. • Other biofuels policies did not consistently affect patenting in those technologies. • Research on biofuels may benefit research in biotechnology.