Survival of the Greenest
New Horizons in Institutional and Evolutionary Economics series
Chapter 1: Introduction
Economic premises and principles play a major role in the shaping of environmental policy. In traditional neoclassical economics, concepts such as rationality, eﬃciency and optimization are dominant. This leads to an approach that turns out to be unsuitable for the analysis and interpretation of major system changes (transitions) and innovations. Other economic theories provide complementary but sometimes contradictory viewpoints. The most valuable theoretical framework for the study of innovations and transitions is evolutionary economics, with its key concepts of diversity, innovation and selection. The starting premise of evolutionary economics is that human beings act according to bounded rationality, which takes the form of routines, imitation and a limited time horizon. Especially in studies of technological development and innovations, evolutionary economics plays an increasingly important role. In this study we are especially interested in the common grounds of environmental and innovation policy. The key question of this book can be formulated as: What insights does evolutionary economics theory provide for the design of environmental policy that aims to stimulate innovations and a transition to a long-term environmentally sustainable economy? In this study we will focus our attention on energy; in particular, on policies for energy innovation and an ‘energy transition’ to a sustainable energy provision. The key question is therefore translated into three subordinate questions: 1. What concepts and ideas from evolutionary economics can be applied to develop a vision on environmental policy and transition management, how can these concepts be applied and which results can thus be derived? To...