Innovation in Climate Adaptation Technologies in Response to Extreme Weather Events: Evidence from Patent Data

We analyze innovation of climate adaptation technologies in response to weather extremes. Using patent data and original climate indicators at the country level, we estimate the effects of past extreme droughts, precipitation and heatwaves on patenting for adaptation technologies. Innovation response varies by hazard and technology and is strongest for droughts and heatwaves. The impact of extreme events on innovation also varies across countries depending on their long-term hazard exposure and risk. While higher-risk countries on average patent more adaptation technologies than low-risk countries, innovators are more responsive to extreme weather in countries with lower baseline risk. Our findings suggest that extreme weather is more salient to people living in regions less prone to that hazard and, therefore, the shock is more likely to provide new information and induce a larger behavioral response there.