Jim Skea, Renée van Diemen, Matthew Hannon, Evangelos Gazis and Aidan Rhodes
Accelerating the Energy Revolution
Jim Skea, Renée van Diemen, Matthew Hannon, Evangelos Gazis and Aidan Rhodes
This chapter recognises how political-economy debates on green industrial policy are connected to domestic politicians’ and citizens’ expectations of green growth. Trade protectionist measures on ‘green’ technologies are instituted to ensure that any domestic policy used to support the development of green technologies – whether it is for niche policies or more comprehensive industrial policies – are appropriated within the domestic economy. The domestic political economy debate focuses on whether it is worth supporting green innovation and markets if other economies learn to manufacture and export these technologies. The literature on green growth recognises that global competition results in manufacturing shifting to countries where comparative advantage for manufacturing exists. However, these spatial dynamics contradict the domestic political economy expectations of economic spillovers between domestic innovation, manufacturing and markets. This chapter focuses on how this techno-nationalist perspective, and the resulting imposition of trade protectionist measures for domestic manufacturers, is problematic with regard to the objective of green growth and cost-effective decarbonisation efforts. In doing so, it develops a conceptual framework drawn from evolutionary economic geography to understand why manufacturing – but not necessarily innovation – shifts to lower cost economies as these technologies mature from breakthroughs in product and process innovation, to scaling through mass manufacturing that leads to commodity-like price competition. The consequence is changes in value-added to domestic economies from different industrial activities as technologies mature. Through this spatial framework, it demonstrates how different economies are exposed to global competition, and examines how innovation enables economies to become resilient to competition in manufacturing. Lastly this chapter illustrates how supply-side trade protectionism has opportunity costs to restricting the potential size of the domestic market through increasing the costs of green technologies. In doing so, it also has opportunity costs of associated growth, employment opportunities, and costs to decarbonisation through the market deployment of green technologies. Consequently, the chapter seeks to provide a balanced assessment of how domestic economies can achieve green growth from innovation, manufacturing and markets – an aspect that is underappreciated in the international political economy literature on industrial policy and trade disputes over technologies.
Karen Turner and Antonios Katris
Energy efficiency improvements often lead to economic expansion, which in turn leads to increased energy use. As a result, energy efficiency policies are often met with scepticism as they do not deliver the full extent of the energy/environmental benefits that would be possible from an engineering standpoint. Recent work from the International Energy Agency has argued that energy efficiency can deliver a range of socio-economic benefits, wider than simply reductions in energy use and environmental impacts. This chapter argues that it is possible to achieve economic expansion and reductions in energy use simultaneously, essentially decoupling economic impacts of energy efficiency from the energy/environmental impacts. Our modelling work on a small-scale energy efficiency programme in Scotland provides empirical evidence that support this view, clearly demonstrating that it is possible to achieve economic expansion while reducing total energy use. However, the results are not guaranteed in every case. The characteristics of each energy efficiency improvement programme, e.g. timeframe and target (production or consumption side of the economy), have a key role to play in determining the outcomes of each programme. Therefore, a case-by-case analysis is necessary to estimate the potential impacts of an energy efficiency improvement programme.
Antoine Dechezleprêtre, Ralf Martin and Samuela Bassi
Actions to stimulate low-carbon innovation – a global policy priority – are moving full speed ahead. This chapter provides evidence to inform these and other initiatives seeking to stimulate low-carbon innovation. A crucial challenge for climate change policies is ensuring that low-carbon innovation activity is either additional to current R & D expenditures, or at least will displace innovation in polluting technologies rather than other socially valuable innovation. Price-based instruments, such as carbon markets, and quantity-based instruments, such as renewable energy mandates, tend to favour innovation in technologies that are closest to the market. Thus, they need to be complemented by direct support to emerging technologies that will be essential to long-term emissions reduction targets through public funding of R & D and feed-in tariffs. Finally, increasing public support for low-carbon R & D may be politically attractive because low-carbon innovations have greater economic benefits than the carbon-intensive technologies they replace.
Russell Bishop and Milan Brahmbhatt
Economic transformation will be critical to continue the ‘African growth miracle’ and overcome the region’s development challenges. The diversity of African economies, distinctive regional trends and upheavals in global economic conditions means the pattern of economic transformation is likely to be different from those observed in today’s developed countries and there is unlikely to be a single ‘African model’ that all countries can emulate and follow. One such difference highlighted by African regional institutions and within national economic strategies relates to ensuring ‘green’ growth, whereby the natural environment can continue to provide the services on which the welfare of both present and future generations depends. This chapter argues that the conditions and routes for economic transformation in Africa present many opportunities for green – or at least greener – growth in agriculture, energy, cities and the emergence of modern sectors, be they in industry or services. To exploit these opportunities policymakers will be challenged by the scale and pace of change and the requirement to provide jobs, infrastructure and public services for a young and increasingly urbanized population. Progress can also be accelerated through enhanced institutional capacity, and by managing the political economy of change.
Jeroen C.J.M. van den Bergh and Stefan Drews
The literature on growth versus climate shows that theoretical and empirical support for both green growth and anti-growth are currently weak. Both strategies appear to be risky and offer insufficient guarantees for controlling climate change. This chapter proposes another strategy. We need debate in politics and wider society about stepping outside the futile framing of pro- versus anti-growth. Realizing there is a third way can help to overcome current polarization and weaken political resistance against serious climate policy in a post-Paris world. An important advantage of the neutral a-growth strategy is that it can bridge the contrast between green growth and anti-growth positions and thus is able to reduce polarization in the growth debate. Unlike unconditional pro-growth, an a-growth strategy does not give priority to income growth over climate, but is aimed at finding a true balance between all aspects of social welfare.
John A. Mathews
Is green growth feasible and possible – or does it remain a contradiction, an impossibly ambitious or (worse) a delusionary goal? If viewed solely from the perspective of the advanced countries, it might indeed seem contradictory. But when considered as a serious goal for an industrializing country, it proves to be an attractive option that delivers economic growth (and with it, rising prosperity) without subjecting the country to the environmental and geopolitical costs associated with black (fossil-fuelled) growth. The case of China is exemplary in demonstrating this, because (1) China is embarked on the biggest industrialization ever before witnessed; (2) China is being forced by circumstance to find an alternative to black (coal-driven) industrialization; and (3) China’s model – best described as one of strategic pursuit of green growth – is delivering economic benefits while also promising to restrain and eventually reduce carbon emissions.
Based on the green growth concept in a broad sense, this chapter examines the evolution of South Korea’s green growth strategy under the previous two administrations and assesses the performance of and political momentum for green growth. In particular, the chapter focuses on green growth strategies relevant to energy and greenhouse gas emission issues. Since the salient motivation for South Korea to be immersed in green growth was high dependence on fossil fuel, the measures to achieve energy independence and low carbon energy were the core parts of South Korea’s green growth strategies. By exploring the major progress of green growth and assessing its performance, this chapter discusses the path towards a low-carbon society that South Korea is following.
Markus Lederer, Linda Wallbott and Frauke Urban
This chapter presents a valuable framework for analysing green transformations in developing economies using two case studies from the so-called Global South: Costa Rica and Vietnam. Central lessons for other countries are that Costa Rica reversed its pathway of deforestation by reforesting the land and then addressing criticisms of its development by generating more genuinely green growth. Vietnam has previously focused on post-conflict restoration and economic development and has now turned towards green transformations, announcing an ambitious green growth strategy. The chapter shows that these countries – rather than having chosen easy pathways – made difficult choices that went against powerful vested interest groups within the country. This makes the decisions (and possibly the experiences) particularly relevant to other (smaller) countries considering taking a pathway involving green transformation.