In this chapter, Professor Sachs discusses the public policy aspects of innovation. In the transition to low- and net-zero greenhouse gas emission energy systems, advanced technologies will be necessary. Market processes give companies an incentive to innovate because they can earn benefits based upon the benefits of a patent on intellectual property. Directed technological change can also enable rapid and drastic innovation, and many examples are given. Combined efforts of intramural research and public-private partnerships will be necessary in order to reach the two-degree goal. Some of the methods of directed technological change are mentioned, including roadvmapping, public financing, philanthropic financing, global partnerships, prizes, etc. and priorities for directed technological change are given.

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