Innovation effects of energy policy instruments in Germany

Standard environmental economics predicts that market-based policy instruments have a much more positive influence on innovation than command and control policies which are classified as hampering innovations. However, the environmental policy analysis approach from political science downplays the role of policy instruments and stresses the importance of other factors. Against this theoretical background, the paper presents the results of two case studies which analysed the effects of command and control policies in the heating sector. Based on these empirical findings, first conclusions are drawn about the role of energy policy instruments in shaping innovation.