The costs of low-carbon energy fell dramatically over the past decade, leading to rapid growth in its deployment. However, many challenges remain to deploy low-carbon energy at a scale necessary to meet net zero carbon emission targets. If net zero goals are to be met, developing complementary technologies and skills will be a necessary part of the next wave of low-carbon energy innovation. These include both improvements in physical capital, such as smart grids to aid integration of intermittent renewables, and human capital, to develop the skills workers need for a low-carbon economy. We document recent trends in energy innovation and discuss the lessons learnt for policy. We then discuss the potential role for complementary innovation in both physical capital—using smart grids as an example of how policy can help—and human capital, where we show how a task approach to labor informs policy and research on the worker skills needed for the energy transition.

We examine the effect of in-state and out-of-state renewable energy policies on wind energy patenting. Using a semiparametric fixed-effects Tobit model, we regress patent counts on a series of policy variables within a state and a spatially weighted average for each of these policies implemented in other states. We develop a lower bound for the marginal effects and find important differences across policy types. For renewable portfolio standards, overall demand matters. Policies in other states increase innovation, but own-state policies do not. In contrast, for financial incentives such as tax incentives and subsidy policies, own-state policies induce innovation.

As countries reform their patent laws to be in compliance with the Trade Related Intellectual Property Rights Agreement, an important question is how increased patent protection will affect drug prices in low-income countries. Using pharmaceutical trade data from 1996 to 2005, we examine the role of China and India as suppliers of medicines to other middle- and low-income countries and evaluate the competitive effect of medicine imports from these countries on the price of medicines from high- income countries. We find that imports of antibiotics and unspecified medicaments from India and China significantly depress the average price of these commodities imported from high-income trading partners, suggesting that India and China are not only important sources of inexpensive medicines but also have an indirect effect by lowering prices through competition. As India is the leading supplier of medicines in Sub-Saharan Africa, this region will likely be affected most adversely.

In this paper, we improve upon Coe and Helpman’s model of international R&D spillovers, using seemingly unrelated regression (SUR) to include interdependence among national economies and allow for variations in coefficients across countries. We find that the impact of knowledge spillovers on national productivity is context dependent: positive in some cases while negative in others. From our interpretation, the results suggest that both beneficial and competitive effects from foreign knowledge spillovers are important. We view the most important contribution of our work as simply providing evidence of this variation, and suggesting directions for future research to explain this phenomenon.