Editing IPCC:AR6/WGIII/Chapter-16 (section)

=== 16.4.7 Sub-national Innovation Policies and Industrial Clusters ===

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Research examining the impacts of sub-national policies on innovation and competitiveness is sporadic – regional variations have been quantitatively assessed in the USA or China, or with case studies in these and other countries. Research on wind energy in the USA, distributed PV balance of systems in China, and renewable energy technologies in Italy have found that policies that incentivised local demand were associated with inducing innovation, measured with patents ( [[#Corsatea--2016|Corsatea 2016]] ; [[#Fu--2018|Fu et al. 2018]] ; [[#Gao--2019|Gao and Rai 2019]] ). Different policies may have different impacts – for example, in the USA, state-level tax incentives and subsidies induced innovation within the state; but for renewable portfolio standards, policies in other states were associated with innovation because of impact on demand, but own-state policies were not ( [[#Fu--2018|Fu et al. 2018]] ). Research has also noted that the outcomes of policy and regulation on innovation are spatially heterogenous, because of differences in local planning authorities and capabilities ( [[#Corsatea--2016|Corsatea 2016]] ; [[#Song--2019|Song et al. 2019]] ).

Sub-national deployment policies have been associated with different impacts on competitiveness metrics ( ''limited evidence'' , ''medium agreement'' ). Research on green jobs shows positive association between sub-national policies and green jobs or green firms at the metropolitan level as well as the state of provincial level, in both China and the USA ( [[#Yi--2013|Yi 2013]] ; [[#Yi--2015|Yi and Liu 2015]] ; [[#Lee--2017|Lee 2017]] ), while others find no impact of renewable portfolio standards on green job growth in the state ( [[#Bowen--2013|Bowen et al. 2013]] ). Other examples of competitiveness are in the impact of regional green industrial policy in Brazil’s Rio Grande do Sul region in attracting auctioned contracts for wind energy ( [[#Adami--2017|Adami et al. 2017]] ) or in the changes in net positive state revenues associated with removing tax incentives for wind producers in Idaho in the USA ( [[#Black--2014|Black et al. 2014]] ).

Sub-national policies also directly support innovation and competitiveness through green incubators and direct grants or R&amp;D funding for local companies working on clean energy, intending to promote local economic development ( ''limited evidence'' , ''medium agreemen'' t). The literature on the impacts of such policies on innovation and competitiveness is sparse. Some case studies and programme evaluation reports, primarily in the USA, have identified the impacts of sub-national policies on competitiveness — for example, job creation from direct R&amp;D funding in North Carolina ( [[#Hall--2015|Hall and Link 2015]] ), perceptions for local industry development and support for follow-on financing for companies receiving state-funded grants in Colorado ( [[#Surana--2020b|Surana et al. 2020b]] ), and return on investments for the state in research and innovation spending from the New York state’s energy agency ( [[#NYSERDA--2020|NYSERDA 2020]] ). There is a general paucity of metrics on innovation and competitiveness for systematic assessments of such programmes in developed countries, and even more so in India and other developing countries where such programmes have been increasing ( [[#Gonsalves--2019|Gonsalves and Rogerson 2019]] ; [[#Surana--2020a|Surana et al. 2020a]] ).

Although states and local governments increasingly support clean energy deployment as well as directly support innovation, given its link with economic development goals, there is a lack of systematic research on the impacts of these policies at the subnational level. More research – qualitative and quantitative, and in developed and developing countries – is needed to systematically develop evidence on these impacts and to understand the reasons behind regional differences in terms of the type of policy as well as the capabilities in the region.

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