Prize systems incentivize the development of technologies that are underrepresented in social value – like green tech

Prizes have been recommended by many leading scholars to encourage innovation in situations where the patent system fails.124 Because these mechanisms provide an incentive distinct from market demand, prizes may encourage the development of green technologies despite the market's tendency to underrepresent the social value of these innovations.125 The recommended prize fund should offer rewards for a wide range of remediation technologies so that a "full toolbox" of innovative solutions may be developed. Recent trends suggest that members of Congress have begun to recognize the value of prize-based incentive mechanisms. In 2017, for example, Senator Bernie Sanders introduced the Medical Innovation Prize Fund Act.126 This bill proposed the creation of a prize fund of over $100 billion to reward medical innovations based on various criteria.127 Some argue that, because government actors lack the private information that generates market prices, government-led prize funds [*130] allocate resources less efficiently than the patent system.128 Sanders' proposal seems to mitigate these concerns by establishing a diverse board (made up of consumers, R&D entities, health insurance companies, and more in addition to government officials) to administer the fund.129 While market-value input is less important in the green innovation context, as discussed previously, stakeholder input is certainly encouraged.