Professor Anthony Chavez explained public policies to incentivize carbon capture and utilization at the 17th International Conference on Carbon Dioxide Utilization, in Aachen, Germany. Among his thoughts on ways to encourage innovation, primarily through patents, grants, prizes and tax incentives:
• Patents pass the cost of an invention onto purchasers of a patented product rather than impose it on a government budget. They are popular when the value of an invention is uncertain, because they reward inventors through subsequent market activity.
• Grants provide resources to innovators in a development stage and can help offset limited funds. Because they are not contingent upon success of an invention, however, they do not award achievement, just effort.
• Prizes are usually larger monetarily than direct subsidies, but the uncertainty of receiving one can limit their usefulness with risk-averse or less-well-financed innovators.
• Tax credits can provide fairly immediate benefits, but their value requires an innovator to have current income against which to apply the credits.
His summation: The range of considerations suggests governments can use different policies to incentivize different research goals.