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Anyone who doubts that policy can spur innovation should look at the Kyoto Protocol. After it was adopted in 1997, the number of patents for certain technologies used to mitigate climate change climbed worldwide. In fact, just six years later, the number of patents on wind technologies had grown more than five-fold, and those on solar photovoltaic and hydro/marine technologies had more than doubled. The number of new patents for other climate change mitigation technologies, such as carbon capture, biofuels and geothermal energy also rose, though at a rate that was not much faster than the increase for patents in general over the same period.

The surge in new patents tapers off for most climate change mitigation technologies later on (our graph), perhaps in part reflecting the onset of recession. However, it is most likely due to usual time lags associated with filing and processing patent applications. Nevertheless, if Kyoto is a reference, then a new international agreement on climate change would reduce the uncertainty innovators hate, and hopefully give fresh impetus to new innovations and solutions in green technologies.

In the meantime, government policy could help more, as the OECD Innovation Strategy 2010 underlines, by ensuring the basis for innovation is in place in areas such as research spending, entrepreneurship incentives, technology infrastructure in broadband, for instance. Another solution would be to boost demand for these innovative products themselves by engaging in greener procurement.

OECD (forthcoming), The OECD Innovation Strategy–Measuring and Monitoring Innovation, Paris. See

www.oecd.org/environment/innovation