Environmental regulations, market structure and technological progress in renewable energy technology: a panel data study on wind turbines

This paper studies the impact of environmental regulations on the patent activities for wind turbines during the last three decades. The paper controls for energy market liberalisation, arguing that it has an effect on innovation activities.

Main conclusions are: 

• the development of oil prices seems to have little effect on innovation activities for wind turbines, but environmental tax revenues were found to have a positive and highly significant effect on patent activity
• there is strong positive effect of the ratification of the Kyoto Protocol on patent activities in the renewable energy sector 
• there is strong evidence that technology-specific R&D (research and development) expenditures increase patent activities
• there is strong evidence that single price-based policy variables are more effective in energy markets that allow for competition 
• this might suggest that the instruments of this policy encourage firms to continue in seeking more efficient technologies to harness wind energy
• nevertheless, the same effect couldn’t be found for the non-price-based policy instruments, which confirms that these instruments are largely independent of whether or not energy markets are open to competition
  

The document expects that total world demand for wind turbines may affect innovation activities for wind energy technology. In particular, total foreign demand seems to increase the number of patent applications. Still, it points that patentees holding wind turbines patent seem to protect their technology in export market.