Green innovation is essential for climate change mitigation, but not all innovative projects deliver equal social value …. We consider innovator heterogeneity in a model where the policy maker cannot observe innovation quality and directly … subsidize the socially most valuable green innovations. We find that carbon pricing works as an innovation screening device …

innovation. These include both improvements in physical capital, such as smart grids to aid integration of intermittent … innovation and discuss the lessons learnt for policy. We then discuss the need for complementary innovation in both physical …

efficient technology even in the absence of taxation. When taxation is necessary for innovation, both types of taxes are … effective. However, the energy tax outperforms the emission tax in terms of innovation incentives. …