The role of public energy R&D in energy conservation and transition: Experiences from IEA countries

Energy conservation and transition to a low carbon system require energy research and development (R&D) policies due to the underinvestment in private R&D. Employing a panel dataset for 18 members of the International Energy Agency from 1980 to 2015, we empirically assess the contributions of energy R&D policies to energy conservation and energy mix. This paper uses the accumulative energy R&D per capita as a proxy variable to reflect the energy R&D policies and constructs a simultaneous equations model to describe the relationships between energy efficiency, energy mix, and public energy R&D. The results show that public energy R&D decreased the overall energy intensity by 12% and contributed 39% to the decarbonisation of the energy mix during the sample period. The mechanism of the impact of public energy R&D can be explained through the channel of patents on climate change mitigation. Moreover, the effectiveness of energy R&D policies present the heterogeneity across countries. Although the results of this study are based on empirical analysis, it is necessary to establish a theoretical framework to analyse the effects of energy R&D policies in the future.