Skip to main content
Top

Is there a case for or against patents to incentivize green technologies?: A critical evaluation of innovation incentives for the global north and global south

  • Open Access
  • 01-12-2024
  • Forum
Published in:

Activate our intelligent search to find suitable subject content or patents.

search-config
loading …

Abstract

The article delves into the crucial role of patents in driving green technology innovation, addressing the urgent need for climate mitigation solutions. It critically examines the historical emphasis on patents as incentives for innovation and the growing skepticism among scholars. The debate is centered around the effectiveness of patents in promoting green technologies, which exhibit public goods characteristics. The author argues that current patent systems may not be sufficient to address the challenges posed by climate change, particularly in the global south. Alternative incentivization mechanisms, such as prize competitions, advanced market commitments, impact funds, and R&D tax credits, are explored as potential solutions. The article also highlights the need for a complementary approach that combines optimal patent regimes in the global north with alternative instruments in the global south. It emphasizes the importance of global governance reformations to ensure the effective diffusion of green technologies on a global scale.

1 Introduction

Our world society faces an urgent need for innovative problem solutions. Climate change is just a case in point, with scientists calling for “immediate, rapid and large-scale reductions” in the emission of greenhouse gases (GHGs) (IPCC, 2021). Meeting the ambitious maximum temperature increase targets of the Paris Agreement (Bednar et al. 2021; DeAngelo et al. 2021) would require achieving net negative CO2 emissions before 2050 (Detz and van der Zwaan 2019). This is an enormous innovation challenge (Mowery et al. 2010). To deal with it, new green technologies must be invented and diffused to effectively provide climate mitigation on a global scale. This requires a systemic approach that can cope with polycentrism, uncertainty, and pluralism (de Ridder et al. 2023), necessitating the strengthening of global governance that transcends organizations (e.g., Pies and Schultz 2023), industries, sectors, states, and geopolitical divisions (e.g., West vs. East, North vs. South) in pursuit of our common goal of sustainable development.
Historically, economic literature has emphasized the cruciality of patents as the dominant facilitator of innovation (Moser 2016). However, there has evolved doubt among some scholars on whether, and to what extent, patents are functional incentivization instruments for promoting innovations (e.g., Boldrin and Levine 2005, 2013; Trerise 2016). Thus, Boldrin and Levine (2013, p. 3) even formulated “the case against patents” that can be summarized by their statement: “[T]here is no empirical evidence that [patents] serve to increase innovation.” On the other hand, there has appeared research that promotes the idea of patents as facilitators of innovation (e.g., Haber 2016; Spulber 2015, 2021). In line with Spulber (2021) who has formulated “the case for patents”, Haber (2016, p. 814) argues that “the weight of the evidence supports the claim of a positive causal relationship between the strength of patent rights and innovation.” Whereas this debate has principally been centered around the investigation of private goods, the case for the invention (i.e., idea creation: 0 to 1) and innovation & diffusion (i.e., idea commercialization: 1 to n) of “green technologies” is rather characterized by a public goods phenomenon. Thus, recent scholarship has acknowledged that the current system for incentivization is only limitedly able to provide effective solutions when there is insufficient financial interest in specific problems related to public goods (Thorp 2020). This is of particular importance for situations where market failures result in huge negative impacts on human health and wellbeing (i.e., climate change). Yet, the crucial question on how green invention and innovation can be effectively accelerated in the global north as well as in the global south has only been discussed to a minor extent.
In the light of the minor results of the COP 28 in Dubai, the global consensus on the organization of effective incentivization instruments that work for both, countries in the “global north” and “global south”, is now more important than ever. Nevertheless, functional heuristics, in-depth understanding, and viable incentivization mechanisms to enable and diffuse innovation—not only in the “global north”—require more attention in the public, political, and scientific debates since emerging economies are expected to play a key-role in the reduction of global GHGs (IPCC, 2022). Yet, the incentives to innovate and diffuse green technologies are commonly weaker in those countries because they typically lack effective environmental regulation and a substantial price on emissions (caused by limited access orders; see, e.g., North et al. 2007) compared to some forerunner countries in the “global north”.
Figure 1 illustrates the trends in green technology patenting across the global north and south from 2002 to 2023, comparing the global south both with and without China’s contribution. The global north demonstrates a continuous increase in green technology patents, particularly driven by innovations in renewable energy sectors such as solar and wind, with notable contributions from Japan, Germany, and the United States. In contrast, the global south experiences significant growth primarily due to China’s major contribution to green technology, especially in solar energy. However, when China is excluded, the global south exhibits more modest growth, reflecting the need for governance that facilitates innovation and investment in these regions.
Fig. 1
Green innovation patents: global north and global south. The data was retrieved from the World Intellectual Property Organization (WIPO) database, using Patent Cooperation Treaty (PCT) filings as a proxy for green technology innovations, with analyses of renewable energy patent trends from 2002 to 2019 (WIPO, 2024; Fushimi et al. 2018)
Full size image
To address these challenges from a sustainability nexus perspective, it is essential to consider how innovation ecosystems for green technologies intersect with pluralistic social, economic, and environmental systems, particularly in the global south. By developing scalable and coordinated approaches to innovation governance that align across sectors and policy levels, we can create inclusive solutions that integrate market-based incentives with the SDGs, ensuring that technological progress supports global sustainability efforts.
This forum article proceeds in Sect. 2 with describing our method and continues in Sect. 3 with situating our article in the relevant literature streams. We then present our contribution to the debate in Sect. 4, followed by our conclusions in Sect. 5.

2 Method

Instead of conducting a systematic literature review focusing on "gap spotting," this article adopts Alvesson and Sandberg's (2011) method of "problematization," addressing the growing critique of the dominance of gap-spotting approaches in research (e.g., Bartunek et al. 2006; Daft and Lewin 2008). Problematization encourages a critical re-examination of the foundational assumptions underlying established concepts with the aim to generate thought-provoking and impactful research questions (e.g., Delanty 2005; Starbuck 2006). This article applies problematization to critically discuss the current system to incentivize invention and innovation for green technologies referring to the tensions between the global north and the global south. In doing so, we aim to contribute to a more profound and nuanced discussion in this important research field. Our article aims to avoid relying on prepackaged perspectives, instead fostering interesting insights in the context of green innovation debates aimed at addressing climate change, social issues, and advancing ideas to address respective SDGs from a sustainability nexus perspective.
To inform our problematization approach, we applied an integrative review strategy (Snyder 2019; Torraco 2005) that focused on green invention and innovation. Our approach involved evaluating peer-reviewed and non-peer-reviewed articles that addressed both “invention” and “innovation” for green technologies. Using Clarivate Web of Science, Elsevier's Scopus, and Google Scholar, we applied the following search query: “invention” OR “innovation” OR “R&D” AND (“green” OR “green technology” OR “environment” OR “incentive” OR “patent” OR “governance” OR “mechanism” OR “instrument”). This literature search provided us an overview of relevant literature. We then refined the search, specifically identifying publications with substantial content on green invention and innovation. Each selected publication was carefully reviewed by all contributing authors. Throughout the review process, we concentrated on identifying patterns and challenges relevant to our research question, with particular attention to the characteristics of green innovation in both the global north and global south.

3 Synthesis of theoretical insights

3.1 Patents for incentivizing (green) technologies

Historically, there has been a long tradition in the discussion on whether patents are viable instruments to foster incentivization for innovation of new technologies (Moser 2016; Nicholas 2014). Within this vibrant discourse, there exist proponents of patents (e.g., Haber 2016; Spulber 2015, 2021) and opponents of patents (e.g., Boldrin and Levine 2005, 2013; Trerise 2016), holding antagonistic opinions on whether patents “OR” other alternative incentivization instruments should be used to incentivize innovation activities for creating and distributing private goods. While, for the “global north” (for the sake of argument) “it seems likely that, despite their limitations and imperfections, patents will continue to be the cornerstone of the IP legal architecture into the future” (Nicholas 2014, p. 421), the “global south” may require different mechanisms to incentivize invention and diffusion since patent systems are influenced by the broader institutional and economic contexts unique to each country, rather than operating in isolation (Lerner 2002). However, the incentivization for invention and diffusion for green technologies (i.e., public goods characteristics) is hardly to accomplish by patents only – particularly in the “global south”. Therefore, the literature on green innovation and patenting has also proposed alternative instruments to facilitate green innovations largely discussing the impact of subsidies (e.g., Heyl et al. 2022; Kumar, 2017; Rezai and van der Ploeg 2016).

3.2 In the search of incentivization instruments for green technologies

Politicians and scholars have recently resurged concerns regarding the opportunity cost of patents and renewed the interest in the discussion of alternative incentivization instruments for fostering invention and innovation, particularly in cases where business firms lack sufficient financial interest (e.g., Thorp 2020). The most popular discussed alternative is a Prize Competition (grants also fall into this category). The core concept is a promise to pay the originator of a new idea right after invention, tied to specific ex-ante defined criteria (Kremer 1998; Tjornbo, and Westley 2012). In fact, this instrument has the potential to reproduce (some) benefits of patents but with less costly (second-order) effects.
Additionally, scholars, politicians, and practitioners have investigated novel mechanisms such as Advanced Market Commitments (AMCs), or similar instruments. They initially aimed to resolve drawbacks from patents, particularly in the “global south”, by proposing new forms of funding for vaccines (e.g., Kremer and Glennerster 2004; Kremer and Williams 2010). The core idea of AMCs has been that one or more sponsors (e.g., philanthropic organizations, governmental funds) legally commit—in advance of product development and licensure—to underwrite a guaranteed price for a maximum number of predefined purchases. Green innovations (e.g., renewable energy technologies, CO2 removal technologies, etc.) can also be enabled by AMCs. Since “mankind likely needs to achieve negative CO2 emissions before 2050” (Detz and van der Zwaan 2019, p. 1) to achieve the 1.5 °C target of the Paris Agreement (see also e.g., Bednar et al. 2021; DeAngelo et al. 2021), we would need to permanently remove huge amounts of CO2 from the atmosphere. But existing solutions for carbon removal are not available at large scale to date. AMCs could be an opportunity for creating markets for carbon removal (in the “global north” and “global south”). This would incentivize the innovation of scalable carbon removal technologies by providing a strong demand signal without picking a winning technology upfront (Athey et al. 2021).
Another instrument for incentivization that has emerged is an Impact Fund, such as the recently announced “Green Impact Fund for Technology” (GIFT) (Pogge 2023). It pays the innovator ex-post right after an impact assessment confirms the socially or environmentally added value of the innovation. This specific instrument relies on patents in the “global north” and complementarily incentivizes innovation diffusion of green technologies in the “global south” by providing annual impact rewards (Azhgaliyeva et al. 2022). Therefore, it offers a voluntary hybrid mechanism to gratify the impact of GHG-reducing innovations in communities that need it most, whereas the current patent system largely often hampers such diffusion processes for countries in the “global south”.
In fact, all these instruments aim at promoting a spectrum of activities, from technological invention (basic research), defined as the creation of infinitely copy-able ideas, to innovation (applied research), which transforms these ideas to reproducible commercial goods and services directly impacting human welfare. Take green energy technologies (like carbon capture) as a case in point: Patents provide both invention and innovation incentives, but the monopoly phase leads to high costs that restrict the diffusion of new products, especially in “low-income” areas. In contrast, Prize Competitions that pay upfront for the technology, AMCs that condition payments to the use of products/services, or Impact Funds that pay ex-post for measured delivery results are more likely leading soon(er) to a competitive market solution and thus may provide larger quantities of carbon capture (more GHG emission reductions) than patents only. However, these alternative instruments also suffer from potential drawback effects that are—to date—still in large parts un(der)researched.
As shown in Fig. 2, (i) patents, (ii) prize competitions, (iii) advance market commitments (AMCs), (iv) impact funds, and (v) R&D tax credits all reward inventions (i.e., basic research) after the ideas are developed. This retrospective approach means businesses must make investment decisions based on uncertain profit expectations. The instruments used to reward innovation (applied research) have distinct characteristics, each with its own strengths and weaknesses as summarized in Table 1:
(i)
Patents are by design fully customer-oriented instruments driven by expected monopoly profit. However, monopoly prices largely exceed marginal costs and hence impede during the lifespan of the patent the spreading of new ideas and products, thus wasting resources. This inefficiency is amplified for countries in the “global south” where impoverished citizens cannot afford paying high prices. This means that often these people can only be served after patents have run out and competition sets in, driving prices towards marginal costs. Another inefficiency refers to “patent battles”. In some cases, business firms redirect their efforts from value creation to rent seeking. Patents can then be abused to handicap competitors (e.g., by raising rivals’ costs) in a way that even deters future invention and innovation activities. In addition, there may occur the issue of the “anticommons” that is characterized by paradoxically underusing scarce resources due to a variety of property rights interfering with each other (e.g., Heller and Eisenberg 1998). There is also a discussion in the literature about to what extent patents promote or prevent follow-on innovation. The implementation of new technology often consists of a whole series of patents, which can sometimes be held by a single company. Williams (2010) finds that patents hinder follow-on innovation in the short run while newer studies (e.g., Sampat & Williams, 2019) find no significant effects of patents on follow-on innovation.
 
(ii)
If Prize Competitions promise to pay an amount of money that is equal to the value of the monopoly rents (earned by patents), this would have the same effect on the supply of inventions. With regard to innovations, however, Prize Competitions have advantages and disadvantages in comparison with patents (Kremer 1998; Shavell and van Ypersele 2001). On the one hand, since there is no need (and no chance) for monopoly profits, innovations can be supplied at competitive prices near marginal costs. Furthermore, this instrument has the potential to provide solutions to problems related to public goods even when there exists initially insufficient financial interest by business firms. On the other hand, due to its lack in customer-orientation, this philanthropic instrument has also its drawbacks, especially with regard to bringing about sustainably rolled-out large-scale innovation projects. This problem arises from the fact that a committee has to define success criteria upfront (ex-ante). While patents are customer-oriented by design, since they depend on a market demand’s willingness to pay, an element of “pretence of knowledge” is inherent to the instrument of a Prize Competition. This implies two disadvantages: (a) Since the incentivization structure focuses on pleasing the jury rather than potential users, it tends towards leading to demonstration projects. (b) Once the prize is won, the winner has no further incentives to promote the innovation to users. Therefore, the spotlight on ex-ante success criteria and the according absence of ex-post learning processes likely prevent the development of inventions to scalable innovations for providing systemic solutions.
 
(iii)
AMCs guarantee a price to the inventor, e.g., a subsidy per removed ton of CO2, to incentivize firms to supplying their product/service in the “global south” at marginal cost (Kremer and Williams 2010). The price difference is then paid by a private or public funding institution. While AMCs enlarge the circle of customers or clients served, four disadvantages have to be noted. First, in sharp contrast to patents, the instrument requires philanthropy. Second, customer needs and preferences need to be homogeneous in the “global north” and “global south” due to the input-oriented specific targets of AMCs (e.g., CO2 removal technologies, clean water technologies; renewable energy technologies). Third, a reward per use may lead to inefficiencies due to distorted incentives during the roll-out phase. As a case in point, people within easy reach may receive larger amounts of clean water or renewable energy than people living farther away, leading to a cluster risk, and people may get services that are of low benefit to them or may even be harmful. Fourth, AMCs have to deal with a re-import issue (Kremer and Glennerster 2004). They run the danger of a leakage of subsidized products to the “global north”. Such re-imports must be prevented in order to protect high monopoly prices in the regions covered by the patent. Otherwise, short-run profits diminish, and long-run invention and innovation incentives are even weakened. The risk is that corrupt actors in both the public and private sector may be tempted to support leakage in order to personally benefit from re-imports. Such rent-seeking activities in turn cause companies to set equal global prices for innovative products that, however, jeopardize value creation potentials in the “global south”.
 
(iv)
Impact Funds reward the originator of invention and innovation only ex-post after an impact assessment of environmentally and/or socially added value. This is in many respects very similar to AMCs. Both instruments aim at providing innovations to the “global south” at marginal cost. Therefore, both run into the problem of preventing re-imports (Kremer and Williams 2010). And both rely on philanthropic funding. The crucial difference refers to the intervention point in the social process of rolling-out a successful innovation. AMCs gratify on a continuous basis, while Impact Funds, in contrast, gratify ex-post, and thus address more general targets (e.g., quality-adjusted life years) (ibid). Since customer needs and preferences can be heterogenous between the “global north” and “global south”, an Impact Fund is more likely to address such problems more effectively due to its output-orientation. However, special challenges of Impact Funds are (i) deferred gratification that necessitates additional advanced financing making Impact Funds less attractive to potential funders and (ii) the definition of appropriate metrics for ex-post impact that are closely tied to the actual development and deployment of innovations. This requires ex-post assessment of added social and/or environmental value. Such an assessment can be quite challenging if (a) the ideas and their originators are difficult to identify, (b) substitutes or complements of other products on the market exist, (c) ex-post discretion issues occur, and/or (d) the added social and/or environmental value is difficult to measure (ibid). To compensate some of the disadvantages of Impact Funds, actors can use specific contracts that shift (parts of) the ex-post payment to the present with the aim to pragmatically adjust Impact Funds’ incentive compatibility for firms and funders (e.g., risk-sharing agreements, pay-for-performance agreements, time-limited-agreements).
 
(v)
R&D tax credits (and subsidies) reduce the cost of research and development through tax relief. While R&D tax credits do not directly accelerate the diffusion of technologies, they promote knowledge spillovers and long-term innovation (Byun, 2023). By alleviating financial constraints for companies, particularly in high-tech sectors, they encourage firms to invest in new technologies, including green innovations, that align with environmental goals. For example, studies have shown that R&D tax credits increase patenting activities in the United States (Melnik and Smyth 2024) and China (Chen and Yang 2019). Furthermore, R&D tax credits may facilitate the transfer of green technologies to the global south through global supply chains, as firms in the global north develop cutting-edge technologies that can spill over into emerging economies (Dechezleprêtre et al. 2023).
 
Fig. 2
Profit expectations for patents, price competitions, AMCs, impact funds, and R&D tax credits
Full size image
Table 1
Summary of incentivization instruments
Instrument
Characteristics
Strengths
Weaknesses
Consequences
(i) Patent
- Secured markups or licensing fees
- Transitory monopoly rent
- Full customer orientation
- Based on economic self-interest
- Inefficiencies (even amplified for countries in the “global south” –
discrimination)
- “Patent battles”
- “Anticommons”
- Patent aggregation
- Ambiguous effects on follow-on innovation
- No/insufficient supply in “global south” during patent term
(ii) Prize Competition
- Pays upfront for ex-ante criteria
- No monopoly rent
- Potential to provide solutions to problems related to public goods, even when firms initially lack financial interest
- No costumer orientation
- Based on philanthropic funding
- “Pretence of knowledge”
- Reward of invention, not innovation
- Hardly ex-post learning processes
- Demonstration projects
- Low probability to provide systemic solutions
(iii) AMC
- Pays per used unit
- No monopoly rent
- Subsidy per used unit/service
- Incentive for firms to supply in the “global south” at marginal cost
- Based on philanthropic funding
- Customer needs and preferences have to be homogeneous in the “global north” and “global south”
- Rewards per use may lead to inefficiencies in e.g., distribution effects (within easy reach)
- Re-imports must be prevented
- Cluster risk
- Awards input of social process (specific targets)
(iv) Impact Fund
- Pays ex-post for impact
- No monopoly rent
- Customer needs and preferences can be heterogenous in the “global north” and “global south” (output orientation)
- Reward added value to society by an innovation
- Supply in the “global south” at marginal cost
- Based on philanthropic funding
- Static performance incentives
- Re-imports must be prevented
- Deferred gratification
- Awards output of social process (general targets)
(v) R&D tax credits (and subsidies)
- Promotes innovation by reducing the cost of R&D through tax relief
- Fosters knowledge spillovers and long-term innovation activities
- No direct promotion of technological diffusion
- May increase investment in innovation activities

4 Refocus from “projectitis” to global governance

Why is all this of importance and of general interest? We would like to draw public, academic, and political attention to two reasons, a minor and a major one.
First, the ‘state-of-the-art’ development policy runs the danger of “projectitis”: an obsession with static small-scale projects. They are easy to evaluate but have difficulty in generating dynamic large-scale effects. New incentivization schemes for invention and innovation may help to redirect resources towards fostering a more systemic, market-based, and consumer-oriented path of development.
Second, the current regime of global governance leads to conflicts of interest between dynamic business firms, located in the “global north”, and the citizens and governments, located in the “global south”, who—for understandable reasons—lack the patience of waiting for patents to expire, especially with regard to innovations where the stakes are so high that delivery delays cost human lives. Under current circumstances, creative business firms run the danger that their intellectual property rights are violated. “Forced technology transfers” (e.g., compulsory licensing) are just a case in point (Davidson et al. 2022), with the negative consequence that a short-term advantage (cheap access to a specific product) leads to long-term disadvantages (weaker incentives to create knowledge and disseminate new products). Against this background, it would be helpful to come up with new ideas and initiatives for a global regime that incentivizes business firms to provide faster technology transfers on a voluntary basis and thus brings about a stronger bond of worldwide solidarity than is currently in place.
Instead of an “either OR” discussion (i.e., patents vs. alternative instruments) that can largely been observed in the contemporary discourse (e.g., Boldrin and Levine 2013; Spulber 2021), this article proposes a complementary approach, i.e., optimal patent regimes in the “global north” AND alternative instruments in the “global south” that accounts for the public good characteristics of green technologies and for the governance instabilities (e.g., limited access orders) in large parts of the “global south”.
An optimal patent regime in the “global north” that favors “an optimal level of intellectual property rights regulation above which further enhancement reduces innovative activities” (Yi 2007, p. 436) requires national and transnational governance that needs to be continuously refined and revised since the rapidly and disruptively changing business environments, industry circumstances, and the necessity to reach global net negative CO2 emissions before 2050 will likely affect the equilibrium of optimality for (green) patent regimes in the near future. This may require a continuous adjustment of patent regimes and policies in the “global north” according to the (expected) intensity and direction of environmental changes. Hence, maintaining a dynamic perspective on incentives for invention and innovation is crucial for fostering technological advancement and promoting green growth across the global north and south (e.g., Borel-Saladin and Turok 2013; Spash 2013; Schultz 2021, 2022; Schultz and Reinhardt 2022, 2023; Schultz and Pies, 2024 Schultz et al., 2024).
In the “global south”, complementary incentivization mechanisms should be considered as long as we expect strong positive externalities (e.g., Orjuela-Ramirez et al. 2024; Wong 2020). According to our analysis, the impact funds for green technologies provide a vibrant instrument to incentivize the diffusion of green technologies in the “global south”, since they account for heterogenous customer needs and preferences (output orientation), reward added value to society by innovation, and diffuse green technologies at marginal cost to the citizens awarding the output (i.e., ex-post impact) of environmental-friendly progress rather than the input (ex-ante project-plan). This combination of patents and alternative instruments requires global governance reformations in form of viable arrangements between public ordering (1st order) and private ordering (2nd order) that create a rule-based framework, which ensures (1) financing of projects concerning their societal impact; (2) transparency in competition processes between projects for basic research and applied research ensuring comparability and reproducibility; (3) evaluation of projects based on reliable, transparent, and comparable data to create an entry in an institutional feedback loop (i.e., virtuous cycle), fostering an enabling environment for mitigating climate change on a global scale without leaving some countries or even continents behind, as recently criticized by Mutiso (2022) in her article stating that “[n]et-zero plans exclude Africa … leaving out more than one billion people.”

5 Conclusions

Summing up, the world not only needs experiments for more invention and innovation. It also needs experiments for a better institutional support of invention and innovation. Further mechanisms could be designed in the form of global tax incentives for differential pricing, global agreements on tax incentives for soft licenses in selected countries, discussion rounds on the re-import issue at a G20 level, and innovative processes for avoiding compulsory licensing. Therefore, we call for further political and academic efforts on investigating, creating, and utilizing viable incentivization mechanisms to realize experimental pilots. In general, we hold that the political and scientific debate should be recentered from the current status quo of “projectitis” to innovative “global governance” with the aim to ensure the diffusion of new technologies on a global scale, but without (a) leaving particular countries behind, while at the same time (b) maintaining companies’ systemic dynamism in the long run. Concludingly, this study highlights that our world society increasingly depends on policies like a reduction of CO2 or the fight against pollution that are effective on a planetary scale, both in the “global south” and in the “global north”. Addressing such challenges in the future requires not only enhanced invention and innovation activities but also an improved innovation regime that intelligently combines green patents with alternative incentivization mechanisms, fostering a sustainability nexus approach to facilitate sustainable global development.

Acknowledgements

We are grateful to Prof. Dr. Ulrich Blum, Prof. Dr. Aidan Hollis, Prof. Dr. Klaus Leisinger, Prof. Dr. Thomas Pogge, Dr. Robert J. Reinhardt, and Benjamin Roth for their valuable comments and suggestions on previous versions of this article.

Declarations

Conflict of interest

The authors declare no conflict of interest.
Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits use, sharing, adaptation, distribution and reproduction in any medium or format, as long as you give appropriate credit to the original author(s) and the source, provide a link to the Creative Commons licence, and indicate if changes were made. The images or other third party material in this article are included in the article's Creative Commons licence, unless indicated otherwise in a credit line to the material. If material is not included in the article's Creative Commons licence and your intended use is not permitted by statutory regulation or exceeds the permitted use, you will need to obtain permission directly from the copyright holder. To view a copy of this licence, visit http://creativecommons.org/licenses/by/4.0/.
Title
Is there a case for or against patents to incentivize green technologies?: A critical evaluation of innovation incentives for the global north and global south
Authors
Felix Carl Schultz
Vincent Czyrnik
Ingo Pies
Publication date
01-12-2024
Publisher
Springer Berlin Heidelberg
Published in
Sustainability Nexus Forum / Issue 1/2024
Print ISSN: 2948-1619
Electronic ISSN: 2948-1627
DOI
https://doi.org/10.1007/s00550-024-00558-6
go back to reference Alvesson M, Sandberg J (2011) Generating research questions through problematization. Acad Manag Rev 36(2):247–271
go back to reference Athey S, Glennerster R, Ransohoff N, Snyder C (2021) Advance market commitments worked for vaccines. They could work for carbon removal, too. Politico, https://www.politico.com/news/agenda/2021/12/22/carbon-removal-advance-market-commitments-525988
go back to reference Azhgaliyeva D, Hollis A, Pogge T, Rahut D, Yao Y (2022) Financing a green future: the energy transition mechanism (ETM) and the green impact fund for technology (GIFT). Policy brief. (German Development Institute, 2022). https://www.think7.org/wp-content/uploads/2022/04/Climate_Financing-a-green-future-the-energy-transition-mechanism-ETM-and-the-green-impact-fund-for-technology-GIFT_Azhgaliyeva_Holli_Pogge_Rahut_Yao.pdf
go back to reference Bartunek JM, Rynes SL, Ireland DR (2006) What makes management research interesting, and why does it matter? Acad Manag J 49:9–15CrossRef
go back to reference Bednar J, Obersteiner M, Baklanov A, Thomson M, Wagner F, Geden O, Allen M, Hall JW (2021) Operationalizing the net-negative carbon economy. Nature 596:377–383CrossRef
go back to reference Boldrin M, Levine DK (2005) The economics of ideas and intellectual property. Proc Natl Acad Sci 102(4):1252–1256CrossRef
go back to reference Boldrin M, Levine DK (2013) The case against patents. J Econ Perspect 27(1):3–22CrossRef
go back to reference Borel-Saladin JM, Turok IN (2013) The green economy: incremental change or transformation? Environ Policy Gov 23:209–220CrossRef
go back to reference Byun SK et al (2023) R&D tax credits, technology spillovers, and firms’ product convergence. J Corp Finan 80:102407CrossRef
go back to reference Chen L, Yang W (2019) R&D tax credits and firm innovation: evidence from China. Technol Forecast Soc Change 146(C):233–241CrossRef
go back to reference Daft RL, Lewin AY (2008) Rigor and relevance in organization studies: idea migration and academic journal evolution. Organ Sci 19:177–183CrossRef
go back to reference Davidson MR, Karplus VJ, Lewis JI, Nahm J, Wang A (2022) Risks of decoupling from China on low-carbon technologies. Science 377:1266–1269CrossRef
go back to reference de Ridder K, Schultz FC, Pies I (2023) Procedural climate justice: conceptualizing a polycentric solution to a global problem. Ecol Econ 214:107998CrossRef
go back to reference DeAngelo J, Azevedo I, Bistline J, Clarke L, Luderer G, Byers E, Davis SJ (2021) Energy systems in scenarios at net-zero CO2 emissions. Nat Commun 12:6096CrossRef
go back to reference Dechezleprêtre A, Einiö E, Martin R, Nguyen KT, Van Reenen J (2023) Do tax incentives increase firm innovation? An RD design for R&D, patents, and spillovers. Am Econ J Econ Pol 15(4):486–521CrossRef
go back to reference Delanty G (2005) Social science. Open University Press, Buckingham, UK
go back to reference Detz RJ, van der Zwaan B (2019) Transitioning towards negative CO2 emissions. Energy Policy 133:110938CrossRef
go back to reference Edquist C (2019) Towards a holistic innovation policy: can the swedish national innovation council (NIC) be a role model? Res Policy 48:869e879CrossRef
go back to reference Fleming L, Greene H, Li G, Marx M, Yao D (2019) Government-funded research increasingly fuels innovation. Science 364:6446CrossRef
go back to reference Fushimi K, Bergquist K, Rivera León L, Xu N (2018) Measuring innovation in energy technologies: green patents as captured by WIPO's IPC green inventory. WIPO economic research working paper No. 44. World Intellectual Property organization. Retrieved from https://www.wipo.int/edocs/pubdocs/en/wipo_pub_econstat_wp_44.pdf
go back to reference Haber S (2016) Patents and the wealth of nations. George Mason Law Review 23(4):811–835
go back to reference Heller M, Eisenberg RS (1998) Can patents deter innovation? The anticommons in biomedical research. Science 280:698–701CrossRef
go back to reference Heyl K, Ekardt F, Sund L, Roos P (2022) Potentials and limitations of subsidies in sustainability governance: the example of agriculture. Sustainability 14(23):15859CrossRef
go back to reference Intergovernmental panel on climate change. Climate change widespread, rapid, and intensifying (IPCC, 2021). https://www.ipcc.ch/site/assets/uploads/2021/08/IPCC_WGI-AR6-Press-Release_en.pdf
go back to reference Intergovernmental panel on climate change. (2022). Climate Change 2022: impacts, adaptation and vulnerability (IPCC, 2022). https://report.ipcc.ch/ar6/wg2/IPCC_AR6_WGII_FullReport.pdf
go back to reference Kremer M (1998) Patent buyouts: a mechanism for encouraging innovation. Quart J Econ 113(4):1137–1167CrossRef
go back to reference Kremer M, Williams H (2010) Incentivizing innovation: adding to the toolkit. In: Lerner J, Stern S (eds) Innovation policy and the economy. Vol 10, University of Chicago Press, Chicago
go back to reference Kremer M., R. Glennerster. (2004) Strong medicine: Creating incentives for pharmaceutical research on neglected diseases (Princeton University Press, 2004).
go back to reference Kumar M (2017) A model of emission reduction activity and cost reducing R&D. Int J Soc Ecol Sustain Develop 8:31–56CrossRef
go back to reference Lerner J (2002) Where does state street lead? A first look at finance patents, 1971 to 2000. J Financ 57:901–930CrossRef
go back to reference Melnik W, Smyth A (2024) The effects of state-level R&D tax credits on innovation: evidence from US patents. J Public Econ 236:105157CrossRef
go back to reference Moser P (2016) Patents and innovation in economic history. Annu Rev Econ 8(1):241–258CrossRef
go back to reference Mowery DC, Nelson RR, Martin BR (2010) Technology policy and global warming: why new policy models are needed (or why putting new wine in old bottles won’t work). Res Policy 39(8):1011–1023CrossRef
go back to reference Mutiso RM (2022) Net-zero plans exclude Africa. Nature 611:10. https://doi.org/10.1038/d41586-022-03475-0CrossRef
go back to reference Nicholas T (2014) Are patents creative or destructive? Antitrust Law J 79(2):405
go back to reference North, D. C., Wallis, J. J.; Webb, S. B.; Weingast, B. R. (2007). Limited Access Orders in the Developing World : A New Approach to the Problems of Development. Policy Research Working Paper; No. 4359.
go back to reference Orjuela-Ramirez G, Zuluaga-Jimenez JC, Urbano D (2024) Drivers of eco-innovation: the role of appropriability strategies and complementary assets. Sci Public Policy 51(2):309–323CrossRef
go back to reference Pies I, Schultz FC (2023) The governance of sustainable business model innovation—an ordonomic approach. Scand J Manag 39(1):101246CrossRef
go back to reference Pogge T (2023) A green impact fund for technology. Green and Low-Carbon Econ. https://doi.org/10.47852/bonviewGLCE3202583CrossRef
go back to reference Rezai A, van der Ploeg F (2016) Second-best renewable subsidies to de-carbonize the economy: commitment and the green paradox. Environ Resource Econ 66:409–434CrossRef
go back to reference Sampat B, Williams HL (2019) How do patents affect follow-on innovation? Evidence from the human genome. American Econ Rev 109(1):203–236
go back to reference Schultz FC (2021) Governance as a “game changer” for the circular economy: a commentary on circular supply chain governance. Acad Strat Manag J 20:1–3
go back to reference Schultz FC (2022) The circular economy and economic growth—an irreconcilable tradeoff? Resour Conserv Recycl 183:106351CrossRef
go back to reference Schultz FC, Pies I (2024) The circular economy growth machine—a critical perspective on “post-growth” and “pro-growth” circularity approaches. J Ind Ecol 28(1):17–24CrossRef
go back to reference Schultz FC, Reinhardt RJ (2022) Facilitating systemic eco-innovation to pave the way for a circular economy: a qualitative-empirical study on barriers and drivers in the European polyurethane industry. J Ind Ecol 26(5):1646–1675CrossRef
go back to reference Schultz FC, Reinhardt RJ (2023) Technological challenges and opportunities to plastics valorization in the context of a circular economy in Europe. Sustainability 15(4):3741CrossRef
go back to reference Schultz FC, Valentinov V, Reinhardt RJ, Pies I (2024) The circular economy rebound effect—reconceptualizing rebound approaches and mitigation opportunities from an ordonomic perspective. J Ind Ecol 28(3):374–385CrossRef
go back to reference Shavell S, van Ypersele T (2001) Rewards versus intellectual property rights. J Law Econ 44(2):525–547CrossRef
go back to reference Snyder H (2019) Literature review as a research methodology: an overview and guidelines. J Bus Res 104:333–339CrossRef
go back to reference Spash CL (2013) The shallow or the deep ecological economics movement? Ecol Econ 93:351–362CrossRef
go back to reference Spulber DF (2015) How patents provide the foundation of the market for inventions. J Compet Law Econ 11(2):271–316CrossRef
go back to reference Spulber DF (2021) The Case for Patents. World Scientific Publishing, SingaporeCrossRef
go back to reference Starbuck WH (2006) The production of knowledge: the challenge of social science research. Oxford University Press, OxfordCrossRef
go back to reference Thorp HH (2020) An opportunity to improve innovation. Science 370:6522CrossRef
go back to reference Tjornbo O, Westley FR (2012) Game changers: the big green challenge and the role of challenge grants in social innovation. J Soc Entrepreneurship 3(2):166–183CrossRef
go back to reference Torraco RJ (2005) Writing integrative literature reviews: guidelines and examples. Hum Resour Dev Rev 4(3):356–367CrossRef
go back to reference Trerise J (2016) The influence of patents on science. Politics, Philosophy Econ 15(4):424–450CrossRef
go back to reference Williams HL (2010) Intellectual property rights and innovation: evidence from the human genome. J Polit Econ 121:1–27CrossRef
go back to reference Wong, P. (2020). 29 Achieving environmental justice: lessons from the global south.
go back to reference World Intellectual Property Organization (WIPO). (2024). Mapping innovations: patents and the sustainable development goals. Retrieved from https://www.wipo.int/web/patent-analytics/mapping-innovations-patents-sustainable-development-goals
go back to reference Yi Q (2007) Do national patent laws stimulate domestic innovation in a global patenting environment? A cross-country analysis of pharmaceutical patent protection, 1978–2002. Rev Econ Stat 89(3):436–453CrossRef

Premium Partner

    Image Credits
    Korero Solutions/© Korero Solutions