Social rate of return to R&D on various energy technologies: Where should we invest more? A study of G7 countries

- Allocation of R&D funding in various energy technologies is a challenging task.
- This can be done by estimating the social rate of return for R&D investments
- We investigate various technologies' social rate of return for the G7 countries.
- R&D funding yields social benefits from energy efficiency and nuclear technologies.
- R&D investment on fossil fuels has negative social rate of return.

The importance of investment in Research and Development (R&D) in the energy sector is indisputable especially considering the benefits of new technologies to sustainability, security and environmental protection. However, the nature and potential of various energy technologies that are capable of improving the energy and environmental conditions globally is a challenging task for governments and policy makers that have to make decisions on the allocation of funds in R&D. To do so, the optimal resource allocation to R&D should be determined by estimating the social rate of return for R&D investments. This paper aims to estimate the social rate of return of R&D on various energy applications and technologies such as energy efficiency, fossil fuels, renewable energy sources, and nuclear for the G7 countries. The results show that primarily R&D investment on Energy Efficiency technologies and Nuclear are the ones that yield high social benefits for all G7 countries while exactly the opposite holds for Fossil fuels.