Past Projects Related to Invention & Commercialization:
Confronting Regulatory Cost and Quality Expectations: An Exploration of Technical Change in Minimum Efficiency Performance Standards
2015, Margaret Taylor, C. Anna Spurlock, and Hung-Chia Yang
This project took the form of a retrospective review of minimum efficiency performance standards (MEPS) for appliances, focusing on regulatory expectations and post-regulatory outcomes of technological change. Ex ante data included rulemaking analyses and other documents in the regulatory docket. Ex post data included rich, high resolution data covering product price, quality, and design. Key findings included: (1) MEPS rulemaking analyses significantly overestimated observed product prices; (2) the energy efficiency of products purchased after regulation generally exceeded the regulated; (3) unregulated aspects of product quality at the time of sale often improved in conjunction with MEPS events; (4) product reliability generally improved over the period of time the products have been regulated; ( 5) within-model price declines (i.e., product-level price declines without consideration of model entry or exit) occurred across products, and these declines were better differentiated by product architecture than by energy efficiency levels for the two products we analyzed; (6) the dominant design of one product, clothes washers, adapted in only a few years to MEPS that were originally expected to be so “technology-forcing” that they were deemed likely to eliminate that design from the U.S. market; and (7) for one product, clothes washers, highly correlated product features contributed both to regulatory performance and to unregulated aspects of product quality.
Shifting the Focus from Emissions to Competitive Strategy: Towards a New Conceptual Framework of Climate Policy and Innovation
2014, Prepared by Margaret Taylor and Tobias Schmidt for the International Schumpeter Society Symposium
Rapid technological change in the direction of decarbonization is a crucial means to stabilize the climate. International climate policy-making has traditionally viewed the climate stabilization problem and its response based on resolving the negative externality of pollution associated with economically productive activities, rather than as a problem of inducing technological change, which has been considered as a “black box.” We draw from the work of Porter and Schumpeter to develop a graphical language that assists in visualization of the likely effects of full cost accounting of pollution on innovation in the electricity sector. We conclude with reflections on next steps, including sketching implications of market conditions on the expected impact of policies imposed at various points along a sector’s value chain.
Structuring Knowledge on Policies to Redirect and Accelerate Technological Change in Low-Carbon Technologies: The Cases of Wind and Photovoltaic Power
2013, Margaret Taylor and Tobias S. Schmidt
Abstract: Stabilizing the climate will require a politically and economically sustainable transition of the electric power system to much lower emitting generation technologies that can meet the aspirations of a growing global population. The goal of this report is to synthesize the known empirical understanding of the interplay between current policies and innovation in renewable energy technology, with a particular focus on power generated by the wind and by solar photovoltaics (PV). To structure this knowledge, we provide a mapping between the practical, tangible aspects of the wind and PV industries and the observed variables of importance to different theories and strains of the innovation literature. This mapping provides a framework with which we illustrate the first and second-order investment effects of current wind and PV power-relevant policies on technological change. We focus in particular in this report on applying this framework to better understand the innovation effects of two specific policies – feed-in-tariffs and a cap-and-trade program – in the European context. The report concludes with reflections on what our current level of knowledge makes clear and leaves open about how to most effectively accelerate and redirect technological change for climate stabilization.
An Exploration of Innovation and Energy Efficiency in an Appliance Industry
2012, Margaret Taylor, Sydny Fujita, Larry Dale, and James McMahon
Abstract: This report provides a starting point for appliance energy efficiency policy to be informed by an understanding of: the baseline rate and direction of technological change of product industries; the factors that underlie the outcomes of innovation in these industries; and the ways the innovation system might respond to any given intervention. The report provides an overview of the dynamics of energy efficiency policy and innovation in the appliance industry, introduces the competitive framework of this industry (which includes an important role for government), defines and discusses the processes and outcomes of innovation in this context, and frames the dilemmas facing energy efficiency policy-makers when considering innovation. The report also provides details of research design and first-order results of a pilot study to empirically and systematically assess the inputs, outputs, and conduct of innovation involved in a case appliance (refrigerators). The results, which have been analyzed at a first-order, speak to the high concentration of the industry, the stability of the market positions of leading firms in the industry, the similarity between the market share and intellectual property positions of the leading firms, the growing importance of R&D in the appliance industry and in refrigerator development (although there is an indication that the industry lags the best practices of comparable industries and firms of similar size), the gradual decline of innovation focus on the energy aspects of refrigerators, and the diversity of the leading firms with respect to their capability to assimilate knowledge. The pilot study itself is novel in attempting to build an initial bridge between long-standing concepts in the innovation literature, such as the resource-based-view of the firm, dynamic capabilities, absorptive capacity, etc., and issues in the energy efficiency policy arena.
Keywords: Innovation, energy efficiency, policy, technological change
Innovation under cap-and-trade programs
2012, Margaret R. Taylor
Policies incentivizing the private sector to reach its innovative potential in “clean” technologies are likely to play a key role in achieving climate stabilization. This article explores the relationship between innovation and cap-and-trade programs (CTPs)—the world’s most prominent climate policy instrument—through empirical evidence drawn from successful CTPs for sulfur dioxide and nitrogen oxide control. The article shows that before trading began for these CTPs, analysts overestimated the value of allowances in a pattern suggestive of the frequent a priori overestimation of the compliance costs of regulation. When lower-than-expected allowance prices were observed, in part because of the unexpected range of abatement approaches used in the lead-up to trading, emissions sources chose to bank allowances in significant numbers and reassess abatement approaches going forward. In addition, commercially oriented inventive activity declined for emissions-reducing technologies with a wide range of costs and technical characteristics, dropping from peaks before the establishment of CTPs to nadirs a few years into trading. This finding is consistent with innovators deciding during trading that their research and development investments should be reduced, based on assessments of future market conditions under the relevant CTPs. The article concludes with a discussion of the results and their implications for innovation and climate policy.
Learning from California’s Zero-Emission Vehicle Program
2007, Louise Wells Bedsworth and Margaret R. Taylor
The California Air Resources Board (CARB) created the Zero-Emission Vehicle (ZEV) program in 1990 hoping to achieve significant emission reductions from California’s passenger vehicles; given the limited zero-emissions options available at the time, ZEV created a de facto sales mandate for battery-electric vehicles (BEV). When battery-electric vehicles were not meeting necessary cost and performance goals, the ZEV program was modified to provide credit for new types of clean conventional vehicles, reflecting uncertainty in the potential for furthering BEV technology. Patenting data show a weakening innovative push by industry over time, though there have been some technology spillovers, such as battery technology for hybrid-electric vehicles. Our findings suggest that CARB would be better served by a technology-neutral program, such as an updated version of the Low-Emission Vehicle program.
Government Actions and Innovation in Clean Energy Technologies: The Cases of Photovoltaic Cells, Solar Thermal Electric Power, and Solar Water Heating
2007, Prepared for CEC PIER Program by Margaret Taylor, Greg Nement, Michael Colvin, Loida Begley, Cyrus Wadia, and Tyler Dillavou
Abstract: This report explores the dynamics of policy design and innovation in photovoltaic cells, solar thermal electric power, and solar water heating. These three “solar” technologies are important examples of greenhouse gas-reducing technologies. Their importance is not merely because of their future potential in supporting the development of a carbon-neutral energy system, but because they provide an opportunity to observe the way policy supporting technological innovation and organizational behavior have played out in the past. Through a detailed policy history, a treatment of major technological innovations and market developments, and a combination of complementary quantitative and qualitative metrics of innovation, this report arrives at several implications for future policy design. These policy implications consider inventive activity, knowledge transfer activity, learning-by-doing, and other aspects of the innovation process—as well as strategic behavior by firms, ranging from technology designers to system installers. In addition, there is some attention to the treatment of technological change in climate models.
Keywords: Photovoltaic, solar thermal electric, STE, solar water heating, SWH, technological innovation, clean energy technologies
Government Actions and Innovations in Environmental Technology for Power Production: The Cases of Selective Catalytic Reduction and Wind Power in California
2006, Prepared for CEC PIER Program by Goldman School of Public Policy (UCB). Margaret Taylor with Dorthy Thornton, Gregory Nement, Michael Colvin
Abstract: This report investigates how government actions induce innovation—the overlapping activities of invention, adoption and diffusion, and learning-by-doing—in two climate-relevant environmental technologies: selective catalytic reduction (SCR) for nitrogen oxide (NOX) control from power plants, and wind power. The technology and history of government actions relevant to each case are reviewed, along with related market developments. Then analyses of public R&D funding, patents, expert interviews, conference proceedings, and experience curves are applied to each case. Results for SCR indicate that: the lack of stringency in federal regulation can focus inventive activity along certain technology pathways, to the exclusion of more promising ones; leadership in California can create a niche market—and related incentives for invention and opportunity for learning from operating experience—for technologies that cannot gain a foothold in the rest of the country; and utility deregulation tends to inhibit collaboration that can foster innovation. Results for wind power indicate that: government actions can be very successful in incentivizing investment in environmental technologies and beginning a new industry that will then have the opportunity to learn from operating experience; when federal commitment to a nascent technology is unpredictable (hefty tax credits are allowed to expire, public R&D is slashed), there is a disincentive for commercially relevant inventive activity, as measured by patents; performance-based standards such as state Renewable Portfolio Standards appear to foster a more stable market, and consequent incentives for innovation, than do tax credits; and government plays an important role in fostering knowledge transfer.
Keywords: Technological change; innovation; climate technology; environmental technology;
Technology Innovations and Experience Curves for Nitrogen Oxides Control Technologies
2005, Sonia Yeh, Edward S. Rubin, Margaret R. Taylor, David A. Hounshell
Abstract: This paper reviews the regulatory history for nitrogen oxides (NOx) pollutant emissions from stationary sources, primarily in coal-fired power plants. Nitrogen dioxide (NO2) is one of the six criteria pollutants regulated by the 1970 Clean Air Act where National Ambient Air Quality Standards were established to protect public health and welfare. We use patent data to show that in the cases of Japan, Germany, and the United States, innovations in NOx control technologies did not occur until stringent government regulations were in place, thus “forcing” innovation. We also demonstrate that reductions in the capital and operation and maintenance (O&M) costs of new generations of high-efficiency NOx control technologies, selective catalytic reduction (SCR), are consistently associated with the increasing adoption of the control technology: the so-called learning-by-doing phenomena. The results show that as cumulative world coal-fired SCR capacity doubles, capital costs decline to 86% and O&M costs to 58% of their original values. The observed changes in SCR technology reflect the impact of technological advance as well as other factors, such as market competition and economies of scale.
Regulation as the Mother of Innovation: The Case of SO 2 Control
2005, Margaret R. Taylor, Edward S. Rubin, and David A. Hounshell
This paper explores the relationship between government actions and innovation in an environmental control technology—sulfur dioxide (SO2) control technologies for power plants—through the use of complementary research methods. Its findings include the importance of regulation and the anticipation of regulation in stimulating invention; the greater role of regulation, as opposed to public R&D expenditures, in inducing invention; the importance of regulatory stringency in determining technical pathways and stimulating collaboration; and the importance of regulatory driven technological diffusion in contributing to operating experience and post-adoption innovation in cost and performance. A number of policy implications are drawn from this work.
Today’s Edisons or weekend hobbyists: technical merit and success of inventions by independent inventors
2004, Kristina Dahlin, Margaret Taylor, Mark Fichman
Abstract: We set out to determine if independent inventors can be considered “heroes” or “hobbyists”, that is, if they produce the most or the least influential inventions in a product category. We study patented inventions by independent and firm-based inventors by comparing patents along four dimensions: Patent citation impact, detail, scope, and maintenance. Examining 225 tennis racket patents granted in the US between 1981 and 1991, we find that independent inventors are a heterogeneous group who generate inventions that are overrepresented both among the most impactful and the least impactful patents. The metrics we develop provide insight into ex ante identification of the importance of inventions. © 2004 Published by Elsevier B.V.
Keywords: Independent inventors; Patents; Sources of innovation; Technology policy; Innovation indicators
The Influence of Government Actions on Innovative Activities in the Development of Environmental Technologies to Control Sulfur Dioxide Emissions from Stationary Sources
2001, Thesis Dissertation By Margaret R. Taylor
This dissertation seeks to contribute to the environmental technology literature by concentrating on an extended case study of innovative responses to multiple government actions centered on the abatement of a single pollutant, power plant sulfur dioxide emissions, a case with well documented and long-standing history of government intervention and innovative activity. Patents and activity in technical conferences, learning curves, and expert interviews are used to delve into the innovative activities of invention, adoption, diffusion, and learning by doing that occur within the black box of the SO2 industrial-environmental innovation complex. Policy implications of this dissertation include: regulatory stringency appears to be particularly important as a driver of innovation, both in terms of inventive activity and in terms of the communication processes involved in knowledge transfer and diffusion; inventive activity, as captured by patents, is spurred temporarily by the existence and anticipation of government regulatory actions.