Innovation under Uncertainty

Innovation under Uncertainty

The Future of Carbon-free Energy Technologies

The Fondazione Eni Enrico Mattei series on Economics, the Environment and Sustainable Development

Edited by Valentina Bosetti and Michela Catenacci

Innovation under Uncertainty presents original research and insights on innovation in carbon-free energy technologies. Valentina Bosetti and Michela Catenacci provide a complete and informative assessment of the current potentials and limits and offer a detailed analysis of what could, or should, be the drivers to support their success and large-scale diffusion. The results provided in this book offer important and concrete insights and recommendations concerning the development and the deployment of more efficient generation technologies, the demand for which will undoubtedly increase alongside the growing concern for environmental issues and global warming.


Valentina Bosetti, Michela Catenacci, Giulia Fiorese, Elena Verdolini and Laura Aleluia

Subjects: economics and finance, economics of innovation, energy economics, environmental economics, environment, climate change, energy economics, environmental economics, innovation and technology, economics of innovation


Much has been said on how to reduce current anthropogenic emissions with the portfolio of existing low-carbon and carbon-free technologies (see, for example, Arzivu et al., 2011). However, stabilization of atmospheric concentrations of greenhouse gases to a safe level can only be achieved if, eventually, net emissions fall to zero. There is only one way to achieve this goal: through some kind of technological revolution, which necessarily requires high spending on research, development and demonstration (RD & D). Innovation in the energy sector should be aimed both at reaching a more efficient use of energy and at diffusing carbon-free technologies on a large scale. The resulting development and deployment of more efficient generation technologies is not only going to meet the growing concern for global warming, but also the more general ambition for sustainable development. Although RD & D is admittedly only one of the determinants of future energy technology costs, assessing the RD & D effort necessary to promote cost improvements and to overcome non-technical diffusion barriers is a key step to draft appropriate efficient energy policies. The study of the evolution of clean energy technologies is particularly relevant for European countries, in light of their leading position in climate negotiations (EC, 2009a,b) and the crucial role of innovation these countries have been aiming at through the Lisbon Agenda (EC, 2005).