Technology Prizes for Climate Change Mitigation

We analyze whether technology inducement prizes could be a useful complement to standard research grants and contracts in developing climate change mitigation technologies. We find that there are important conceptual advantages to using inducement prizes in certain circumstances. These conceptual inferences are borne out by an examination of the track record of prizes inducing research into public goods, including relevant energy technologies. However, we also find that the prizes’ successes are contingent on their proper design. We analyze how several important design elements could influence the effectiveness of a climate technology prize.