Green transition, industrial policy, and economic development

Abstract

This paper outlines possibilities for a green industrial policy with particular emphasis on developing countries. The question of green industrial policy is investigated by examining experiences and barriers to phasing-in green technologies, focusing on solar PV and energy efficiency as areas for a green industrial policy. The paper outlines a green transition approach to sustain a shift to cleaner and more energy-efficient production processes through clever policy mixes involving elements of push and pull. Rent management and policy adaptation by competent authorities are also part of the model. The paper offers concrete guidance to the question of what governments in developing countries can usefully and realistically do to phase in green technologies given the priorities for development, imperfect institutions for policy-making and implementation, weakly developed innovation systems, and problems of lock-in.