Source: Benedict Probst, et al., “Global Trends in the Invention and Diffusion of Climate Change Mitigation Technologies,” Nature Energy (November 2021), 1077-1086.
Commentary: Probst et al. estimate that the number of new international patent families (patents covering the same or similar inventions in multiple countries) for climate change mitigation technologies (CCMTs) in seven fields (buildings, carbon capture and storage, energy, information and communication technology, manufacturing, transportation, and waste management) decreased at a rate of 5.5 percent per year between 2013 and 2017. This reversed the trend observed between 1995 and 2012, where the number of such patents granted increased at a rate of 10.3 percent per year.
The authors cite falling fossil fuel prices and a mispricing of carbon emissions through inadequate carbon taxing and cap-and-trade mechanisms as the primary reason for this fall in inventiveness. For example, allowances in the European Union’s cap-and-trade scheme caused the price of emissions to fall from €30 per ton of CO2 in 2008 to just €5 per ton of CO2 in 2017. As the price of carbon emissions falls, inventions that were only marginally economical become uneconomical and incentives to embark on new CCMT projects diminishes. However, recent developments—such as the supply shock to natural gas triggered by Russia’s invasion of Ukraine, increased regulation on carbon emissions to meet climate goals, and China’s launching of its nationwide cap-and-trade scheme in February of last year—suggest that the price of carbon emissions will rise and the invention of CCMTs will increase along with it.
