Prizes Versus Patents: A Comment on Jonathan Adler’s "Eyes on a Climate Prize: Rewarding Energy Innovation to Achieve Climate Stabilization"
The economics of innovation typically treats winning a patent as the equivalent of winning a prize, where the reward for getting a patent is the profit the winning innovator1 can extract from the exclusive right to produce a particular item or utilize a particular process. What little there is on this question primarily involves the theoretical benefits and practical problems with having
the government buying out patent holders and providing the relevant products and processes at marginal cost rather than at the high price protected by the patent monopoly. Much of this is motivated by concerns not from climate but in wanting to make patented pharmaceuticals available in very poor countries where the residents are utterly unable to pay the monopoly price.