McDowall, W;
(2021)
R&D tax credits can be a significant source of taxpayer support for fossil fuel innovation.
Environmental Research Letters
, 16
(6)
10.1088/1748-9326/ac0379.
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Abstract
The urgent need to accelerate the transition towards low-carbon energy is well understood. Government support for energy innovation has been an increasing focus of both policy and academic attention in recent years. The debate has focused on direct spending by governments on research and development (R&D). However, governments also support R&D indirectly, through tax credits. This source of government support has been overlooked in the academic and policy debate on energy innovation, in part because publicly available data on R&D tax credit expenditures typically do not enable the identification of spending specific to energy. This article provides the first published data on R&D tax credits in the energy sector, drawing on administrative data from Australia, Canada, Norway and the UK. This data shows that indirect support through tax credits can be a large source of support for innovation in fossil fuel extraction companies, though this differs by country. As a result, publicly available data on direct R&D spending by government can significantly understate government support for innovation in fossil fuel extraction. The article also presents patent data to show, for the UK and for Norway, that less than 5% of R&D activity in fossil fuel extraction firms is devoted to low-carbon technologies. The article concludes with the recommendation that governments should consider removing tax credit support for R&D activities that facilitate the extraction of fossil fuels.
| Type: | Article |
|---|---|
| Title: | R&D tax credits can be a significant source of taxpayer support for fossil fuel innovation |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1088/1748-9326/ac0379 |
| Publisher version: | https://doi.org/10.1088/1748-9326/ac0379 |
| Language: | English |
| Additional information: | Original content from this work may be used under the terms of the Creative Commons Attribution 4.0 license. Any further distribution of this work must maintain attribution to the author(s) and the title of the work, journal citation and DOI. |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Bartlett School Env, Energy and Resources |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10130513 |
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