Population growth and growing incomes in developing and developed countries are leading to increased demand for energy and food, placing significant stress on the environment. At the same time, the increased scarcity of natural resources, and especially concerns about climate change and other environmental side effects, are constraining the traditional supplies of food and fuel. Failure to provide both energy and food in an affordable as well as in an environmentally sustainable manner, as well as climate change, will negatively affect our society, especially the global poor. Finding solutions to food energy problems is both a policy and technological challenge.

The human response to changing conditions has been the development of new, and sometimes disruptive, technologies. For example, fertilizers and pesticides enabled increases in food supply, the engine and electronics have reduced the costs of transportation, communication as well as human effort, and modern medicines have improved human health and well being. However, many of these technologies have negative side effects and their optimal development and use requires both supportive economic policies and effective environmental and health regulations. Thus reaching the balance between market gains and environmental and health side effects has been a major challenge. While economic analysis can and has provided significant insight into the assessment of new technologies, the establishment of institutions and policies to regulate technologies is determined by the political process. While some technologies, such as cell phones, have obvious economic gains and encounter minimal political resistance, the introduction of other technologies that have the potential to address future challenges, such as biofuels, GMOs, nuclear power, geo-engineering and even solar energy, are subject to significant debate. Traditional welfare economic analysis that incorporates scientific knowledge has become the hallmark of environmental and resource economics and can provide normative guidance for policy making. Yet the determination and design of technology policies and environmental regulation is subject to policy discussions and their understanding requires new lenses that combine political and natural resource choices within an economic decision-making framework.

Research on the political economy of innovation can build on several bodies of literature that have emerged in recent decades. First, there is a growing literature on innovation systems, including models of induced innovations, analysis of alternative systems of intellectual property rights and technology transfer from the public to the private sector, as well as the challenges of commercialization and adoption (Zilberman et al., Reference Zilberman, Zhao and Heiman2012). Economists have gained increased understanding of innovation systems and technology adoption in developing countries. Second, the last few decades have seen an expansion of research on the political economy (Rausser et al., Reference Rausser, Swinnen and Zusman2011) in the context of agricultural and natural resources and the role of institutions and human capital in development (Gallego et al., Reference Gallego, Acemoglu and Robinson2014). Third, we are gaining better understanding of consumer preferences for commodity characteristics as well as environmental amenities and risk (Grunert, Reference Grunert2005). Fourth, we are developing enhanced capacity to model the dynamics of the economic and environmental side effects of new technology systems (Zilberman, Reference Zilberman2013) and expanding econometric techniques to utilize newly available big data sources (Einav and Levin, Reference Einav and Levin2013) of both production and biophysical variables.

Human adaptation to the challenge of climate change and the evolution of our economy and environment will, to a large extent, depend on investment in the development and adoption of new technologies. The future of technology is becoming a public debate where corporations, environmental groups, interested scientists and governments provide conflicting information and assessments. Economists have unique tools to enlighten the debate and provide improved policy choices.