We study how individual inventors respond to incentives to work on ?clean? electricity technologies. Using natural gas price variation, we estimate output and entry elasticities of inventors and measure the medium-term impacts of a price increase mirroring the social cost of carbon. We find that the induced clean innovation response primarily comes from existing clean inventors. New inventors are less responsive on the margin than their average contribution to clean energy patenting would indicate. Our results strengthen the rationale for government intervention to expedite the energy transition.

---

1 March 2025

---

American Economic Review: Insights 7(1) , pp.90-106, 2025

---

DOI: 10.1257/aeri.20230522

https://www.aeaweb.org/articles?id=10.1257/aeri.20230522

This Journal article is published under the centre's Growth programme.