October 19, 2026 
From the abstract:
I study why clean technologies are adopted slowly and how this slow adoption undermines clean innovation. Using an event study around large energy price swings, I provide evidence that industries with short-lived assets see greater increases in energy efficiency and green patenting, consistent with lock-in among users of long-lived assets. To assess policy implications for the green transition, I embed the feedback between irreversible investment and energy saving innovation in an integrated assessment model. Slow adoption delays the pass-through of clean innovation to energy demand relative to benchmark models. The sluggish uptake of innovation justifies higher carbon taxes if the social cost of carbon rises with cumulative emissions. These higher taxes reduce investment, thereby reducing R&D incentives and further limiting the power of green innovation in facilitating emission reductions in the short to medium run. Replacement subsidies can partly substitute for carbon taxes. Uniform subsidies improve fuel efficiency but raise emissions via scale effects. Redirecting these subsidies toward electrification is a more effective second-best when the electricity mix is sufficiently clean.
