Randomised controlled trials: Can they inform the development of green innovation policies in the UK?

This report explores if there is a case for the wider use of experimental methods, and randomised controlled trials (RCTs) in particular, as a source of evidence to inform green innovation policy development in the UK, with lessons applicable in other countries.

A randomised controlled trial (RCT) is an experimental method of policy evaluation that enables understanding of the causal effects of policies with a high level of confidence. From a comprehensive review of the global evidence base on RCTs the authors identify trials that have already been conducted, are currently underway or are being planned which can inform the development of policies aimed to support green innovation. By assessing the attributes of the studies identified, they try to understand the circumstances that made an RCT the chosen method for building evidence in a green innovation policy area. The review draws insights from the attributes of the RCTs identified, rather than their quality or policy impact.

The authors seek to answer the following questions:

  • Why have RCTs not been used more widely to date for the development of green innovation policies in the UK?
  • Can RCTs have a greater role?

The authors review the existing literature and use results from interviews they held with policy professionals working specifically in green innovation policy or RCT design and implementation in the UK. They then evaluate which of the UK’s priority areas for innovation, as set out by the Net Zero Innovation Portfolio, may represent the greatest opportunities for RCT-based evidence-building and find that energy storage and flexibility, homes and buildings, and hydrogen may present fertile grounds for RCT-based evidence-building on innovation policies in the UK.

Policy implications

  • More evidence on the causal effects of policies designed to achieve specific technological objectives is needed to ensure public resources are used most efficiently in the drive to meet climate targets. RCTs can provide this.
  • While RCT-based evidence on what works for driving green innovation is as yet limited, there is a lot to be gained from an open-minded approach to recognising and learning from transferable knowledge.
  • Following best practice in research can ensure that knowledge from future green innovation RCTs can feed into a shared, credible evidence base that can be used as a public good to accelerate net zero-aligned innovation.
  • An RCT-enabled experimental approach to policy development – identifying different policy alternatives with an open mind, testing promising ones at small scale and identifying those that work based on well-defined intermediate outcomes before scaling up – might be especially relevant for policies aiming to support the RD&D of green technologies as the potential of RCTs to generate evidence in this area appears largely unexploited.
  • The heterogeneity and relatively small size of the pool of innovators targeted by many of the UK’s innovation policies, as well as the long, indirect and complex relationships between many green technologies and their ultimate users, present challenges to implementing RCT-based evaluations for green innovation in the UK.
  • Energy storage and flexibility, homes and buildings, and hydrogen may present fertile grounds for RCT-based evidence-building for the UK’s innovation policies.
  • RCTs are one of the most rigorous but not the only rigorous method for policy evaluation. Whichever method is chosen, it would be most useful if complemented with other investigations to extract information on ‘why’ and ‘how’ a policy works, to generate knowledge that can be used in a wider range of contexts.