Adam Jaffe

Since the Intergovernmental Panel on Climate Change (IPCC) Fourth Assessment Report (AR4), there has been a marked increase in national policies and legislation on climate change, however, these policies, taken together, have not yet achieved a substantial deviation in emissions
from the past trend. Many baseline scenarios (those without additional policies to reduce emissions) show GHG concentrations that exceed 1000 ppm CO2eq by 2100, which is far from a concentration with a likely probability of maintaining temperature increases below 2 °C this century. Mitigation scenarios suggest that a wide range of
environmentally effective policies could be enacted that would be consistent with such goals. This chapter assesses national and subnational policies and institutions to mitigate climate change in this context. It assesses the strengths and weaknesses of various mitigation policy instruments and policy packages and how they may interact either positively or negatively. Sector-specific policies are assessed in greater detail in the individual sector chapters (7–12).

This chapter aims to provide a critical assessment of the existing economic theories and empirics that speak to the welfare implications of IPR harmonization and to suggest how they may inform policy debate. The economics of IPR is premised on the tradeoff between dynamic efficiency and static inefficiency associated with the grant of monopoly power of IPR. Studies that exploit recent changes to the US patent system find little support for the dynamic efficiency hypothesis. Historical case studies and empirical studies show that countries, including today’s rich ones, strengthen IPR as they become richer and presumably as they acquire the ability to innovate. Projecting the dynamic efficiency vs. static inefficiency tradeoff to a global context, studies show that harmonization entail welfare loss in the South and possibly the whole world, but technology diffusion from the North to the South may accelerate in response to strengthening of IPR in the South.

Within the field of environmental economics, the role of technological change has received much attention. The long-term nature of many environmental problems, such as climate change, makes understanding the evolution of technology an important part of projecting future impacts. Moreover, in many cases, environmental problems cannot be addressed, or can only be addressed at great cost, using existing technologies. Providing incentives to develop new environmentally friendly technologies then becomes a focus of environmental policy. This chapter reviews the literature on technological change and the environment. Our goals are to introduce technological change economists to how the lessons of the economics of technological change have been applied in the field of environmental economics, and suggest ways in which scholars of technological change could contribute to the field of environmental economics.

Innovation Policy and the Economy provides a forum for research on the interactions among public policy, the innovation process, and the economy. The contributors cover all types of policy that affect the ability of an economy to achieve scientific and technological progress or that affect the impact of science and technology on economic growth. Among the issues covered in Volume 8 are policy challenges at the university-industry interface, the role of innovation and experimentation in the net neutrality debate, and the trade-offs in establishing the scope of patent rights or limitations on patent pools.

The economic importance of innovative activity brings with it an active debate on public policy's effect on the innovation process. This annual series brings the work of leading academic researchers to the broader policy community. Volume 6 considers such topics as the diversity of patent protection and the implications of weak patents for innovation and competition; reforms in U.S. patent policy that will encourage innovation; the multifaceted benefits of the Internet for consumers, including price competition and novel forms of communication; the drug development and approval process; the "offshoring" of research and development; and the advantages of industry-specific studies of the relationship between innovation and competition. The papers highlight the role economic theory and empirical analysis can play in evaluating current and prospective innovation policy alternatives.

The economic importance of innovative activity brings with it an active debate on the effect of public policy on the innovation process. This annual series, sponsored by the National Bureau of Economic Research, brings the work of leading academic researchers to the broader policy community, presenting papers that demonstrate the role that economic theory and empirical analysis can play in evaluating policy. Volume 7 considers such topics as the apparent productivity decline in the pharmaceutical industry; the effect of patents on both the "scientific commons" and cumulative discovery; the flow of new Ph.D.s into industry; a new mechanism to create economic incentives for producers of digital goods that both stimulates innovation and encourages widespread use; and a formal analytical structure for a science of crisis management.