The latest International Panel on Climate Change (IPCC) reports draw a stark picture of the state and urgency related to climate change and the rising concentration of greenhouse gas (GHG) emissions. These reports reiterate the importance of actions by various actors involved in the energy transition, and particular emphasis is given to the role that technological innovation has to play in achieving climate targets. Despite that, the policy coverage related to innovation is still limited, and the analysis of current policies and commitments by countries as part of the Paris Agreement (PA) Nationally Determined Contributions (NDCs) reveals a gap compared to the stated climate objectives.

Achieving these ambitious climate targets requires national policies, international cooperation, and adequate financing. In particular, government spending in R&D for the demonstration and deployment of innovative technologies is pivotal to accelerate their adoption and crowd in private capital. According to the IEA, the level of investments is still below what is needed: around 25 billion are currently mobilized for a portfolio of demonstration projects for low-emission technologies before 2030 while 90 billion of public funding would be required.

To achieve the necessary level of financing and scale, international cooperation and innovative financing mechanisms are critical to provide a fertile ground to crowd in private capitals in early-stage technologies or market deployment.

Against this background, this thesis focuses on three aspects at the core of innovation policies and the energy transition. First, we examine the financing aspects of the energy transition and how central banks' policies can affect agents' and firms' incentives towards the energy transition. Second, we focus on some broader implications of climate change at the governance level by analyzing the emergence of climate litigations. Third, we assess the role of governments in supporting innovation via targeted investment policies.