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Eyes on a Climate Prize: Rewarding Energy Innovation to Achieve Climate Stabilization

Jonathan H. Adler

Case Western Reserve University School of Law; PERC - Property and Environment Research Center

May 3, 2010

Harvard Environmental Law Review, Forthcoming
Case Legal Studies Research Paper No. 2010-15
PERC Research Paper No. 12/16

Stabilizing atmospheric concentrations of greenhouse gases at double their pre-industrial levels (or lower) will require emission reductions far in excess of what can be achieved with current or projected levels of technology at a politically acceptable cost. Substantial technological innovation is required if the nations of the world are to come anywhere close to proposed emission reduction targets. Neither traditional federal support for research and development of new technologies nor traditional command-and-control regulations are likely to spur sufficient innovation. Technology inducement prizes, on the other hand, have the potential to incentivize and accelerate the rate of technological innovation in the energy sector. This paper outlines the theory behind the use of inducement prizes to encourage and direct inventive efforts and technological innovation and identifies several comparative advantages inducement prizes have over traditional grants and subsidies for encouraging the invention and development of climate-friendly technologies. While no policy measure guarantees technological innovation, greater reliance on inducement prizes would increase the likelihood of developing and deploying needed technologies in time to alter the world’s climate future. Whatever their faults in other contexts, prizes are particularly well suited to the climate policy challenge.

Number of Pages in PDF File: 60

Keywords: Greenhouse Gases, Technological Innovation, Prizes, Climate Change, Energy Subsidies, Energy R&D

JEL Classification: K23, K32

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Date posted: March 24, 2010 ; Last revised: December 20, 2013

Suggested Citation

Adler, Jonathan H., Eyes on a Climate Prize: Rewarding Energy Innovation to Achieve Climate Stabilization (May 3, 2010). Harvard Environmental Law Review, Forthcoming; Case Legal Studies Research Paper No. 2010-15; PERC Research Paper No. 12/16. Available at SSRN: http://ssrn.com/abstract=1576699 or http://dx.doi.org/10.2139/ssrn.1576699

Contact Information

Jonathan H. Adler (Contact Author)
Case Western Reserve University School of Law ( email )
11075 East Boulevard
Cleveland, OH 44106-7148
United States
216-368-2535 (Phone)
216-368-2086 (Fax)
HOME PAGE: http://www.jhadler.net

PERC - Property and Environment Research Center
2048 Analysis Drive
Suite A
Bozeman, MT 59718
United States

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