Green Industrial Policy Research Articles

Research on Influence of Computer Technology on Industrial Upgrading and Cooperative Evolution of Environmental Protection Fiscal Policy from Green Finance Perspective

In recent years China’s economic level has been increasing constantly traditional industrial structure and fiscal policy cannot meet existing social needs. With the continuous development of computer technology and its application field expanding, it is necessary to apply computer technology to industrial upgrading and green fiscal policy field. This paper discusses the basic situation of green industry policy, status quo of industrial upgrading and computer technology’s role in this field. Results show that both are mutually reinforcing relations between computer technology and green industries and industrial structure changes are positively correlated.

Green industrial policy in the post grid parity era: Governing integrated Solar+ projects in China

China has entered the age of grid-parity for solar PV technologies, which impose significant challenges for the Chinese government to continue its support on this fast growing sector. The traditional rationale and design of many green industrial policies (GIPs) in the renewable energy sector, such as the multi-tiered feed-in tariff system introduced at earlier stage, has become increasingly inefficient. New policy approaches are needed. We use a case study of Integrated Solar Energy and Desertification Prevention (ISE-DP) initiative in China's Inner Mongolia region to investigate the potential of providing further support for the solar PV industry on the basis of the accrued development benefit, such as ecological restoration, agricultural outputs, and local employment. We argue that genuine and verifiable contributions of these development benefits should be the major criteria for further government support once the levelized cost of renewable energy production is reached. We find that integrating multiple purposes into single solar energy infrastructure project would require a more comprehensive governance framework among various government agencies, private companies, and local communities. In addition, stringent and transparent evaluation systems should be installed to guarantee long term success of ISE-DP business model.

Making Industrial Policy Work for Decarbonization

Industrial policy has moved into the center of debates on climate policy, as the EU’s Green Deal, China’s green industrial strategy, President Biden’s climate agenda, and green stimulus packages such as South Korea’s reflect. This represents a shift away from climate policy as we know it—as classic environmental policy. Industrial policy and environmental policy differ in their policy goals, policy instruments, and distributional effects. One primarily concerned with economic development, the other with cutting greenhouse gas emissions. This raises questions about policy interactions between industrial and environmental policy in broader climate policy mixes, and how these effect global decarbonization. This paper identifies complementary and conflictual dynamics between industrial policy and environmental policy in both domestic and international climate politics. It shows how green industrial policy can advance climate goals and cooperation, but can also present challenges to deepening climate cooperation and reducing greenhouse gas emissions. Developing an understanding of policy interactions is central to leveraging the potential of industrial policy to accelerate global decarbonization.

Green Industrial Policy and Repayable Advance

Green Industrial Policy and Repayable Advance

Designing Conditional Schemes for Green Industrial Policy Under Different Information Structures

We assume that a project requires an initial outlay and may either succeed or fail. The probability of success depends on its type and on the effort of the firm. Only in the case of success do private and external benefits appear. The paper analyzes the optimal design of subsidies under different information structures the state agency and the firm may have over the characteristics of the project. It is proved that under symmetric information structures rewarding success is optimal while, ordinarily, under asymmetric ones, rewarding failure is optimal. While reward success encourages effort, rewarding failure mitigates windfall profit. In asymmetric structures, the second feature dominates. These results emphasize the crucial significance of properly identifying the underlying structure in designing an efficient incentive scheme. The policy relevance of our analysis is discussed in the context of risky programs such as those for the energy transition associated with COVID recovery plans.

Policy Performance of Green Lighting Industry in China: A DID Analysis from the Perspective of Energy Conservation and Emission Reduction

As a component of China’s strategic emerging industries, green lighting is an important industry supporting the high-quality and high-efficiency development of China’s economy, and is also an important way to achieve energy conservation and emission reduction. At present, China has basically established a policy framework to promote the development of green lighting industry, but there is no empirical evidence on the performance of existing policies on energy conservation and emission reduction. Based on the development status of China’s green lighting industry, this paper sorts out the milestones of China’s green lighting industry policy and the current status of the framework of the existing green lighting industry development policies, constructs a policy performance evaluation model for China’s green lighting industry based on the difference-in-difference (DID) model, and evaluates the implementation effects of green lighting industry policies in China from the perspective of energy conservation and emission reduction. The empirical results of China’s 85 cities show that the implementation of green lighting industry policies has significantly promoted regional energy conservation and emission reduction. Finally, this paper puts forward targeted policy recommendations to provide policy support for the transformation of China’s green lighting industry from “large” to “strong”.

Does green industrial policy promote the sustainable growth of polluting firms? Evidences from China

In this research, the impact of municipal green industry policies in 15 cities on the economic and environmental performance of local companies was evaluated, and the policy coordination mechanism was studied. As a dual-goal policy mix, the green industrial policy has been used by Chinese municipal governments to solve the dilemma between the economic growth and environmental mitigation. However, the quantitative evaluation of these green industrial policy trials remains limited. To address this issue, the policy evaluation in this research applied sewage discharge data and operation data of 22,670 Chinese textile firms from 1998 to 2013 from Chinese Environmental Statistics Database. Fixed-effect regression analysis and dynamic difference-in-differences (DID) approach were used to assess the dual-faceted impacts of green industrial policies and their subtypes, as well as the continuity of these impacts. The findings suggest that adopting a dual-objective green industrial policy is an effective approach to encourage heavy-polluting firms to develop in a more balanced and sustainable way. From dynamic DID analysis, these green industrial policies have continuity effects on both chemical oxygen demand discharge intensity and annual revenue of firms after implementation and the general impacts can last for at least 4 years. The study also reveals the heterogeneity in the impacts of three different subtypes of green industrial policy. The technology-push policy subtype can quickly reduce environmental discharge without compromising economic development, while demand-pull policy subtype has a slow effect on the improvement of environmental performance. The balanced policy subtype can promote enterprises to achieve both optimal performance of economy and environment, although the efficiency of balanced policy subtype is between two subtypes. Generally, this research provides reliable basis for the implementation of green industrial policies in developing countries and provides certain inspiration for the enriching of green industry policy theory.

Accelerating Low-Carbon Innovation

Summary Accelerating innovation in low-carbon technologies is fundamental in order to achieve global climate targets. However, only few technologies are currently on track to meet these targets. Here, we review and synthesize the innovation literature to develop a technology typology that helps explain systematic differences in technologies’ experience rates. Based on the typology, we derive implications for policy makers and climate and energy modelers. More specifically, we argue that the Paris Agreement’s focus on the national green industrial policy only suits innovation in certain types of technologies, and thus, should be complemented by top-down measures to coordinate research, development, demonstration, deployment, and regulations across countries.

Can the National Green Industrial Policy Improve Production Efficiency of Enterprises?—Evidence from China

This paper examines whether the national green industrial policy (GIP) can effectively optimize the enterprises’ structural transformation and upgrading, and improve production efficiency of enterprises. Using China’s firm-level data from 1998 to 2007, we take the 2003 “Cleaner Production Promotion Law of PRC” as the turning point of GIP implementation, and employ the difference-in-differences (DID) method to explore the policy effect on total factor productivity (TFP) of enterprises. The analysis shows that GIP can enhance the enterprise’s resource allocation capability and TFP growth. The implementation path of policy mainly relies on the compensation mechanism to incentivize innovation and the elimination mechanism of market selection. Specifically, GIP enhances TFP growth by accelerating the dynamic replacement (enterprise entry and exit) and elimination mechanism of the market, and by promoting innovative production to enhance the enterprise’s production efficiency. Further heterogeneity analysis reveals that state-owned enterprises are more susceptible to the influence of GIP, and GIP exerts more restrictive impact on high-pollution industries. Also, GIP has more significant net spillover effect on technology-intensive enterprises. The study provides a reliable factual basis for the market effect of GIP and the direction for green industry development.

The politics of climate finance: Consensus and partisanship in designing green state investment banks in the United Kingdom and Australia

The Paris Agreement will require national level mitigation action that takes advantage of economic and technological opportunities while redirecting finance towards low-carbon alternatives. However, climate change has been politicized in many countries, potentially blocking the introduction of climate policies and broader green industrial policies. Publicly funded green investment banks (GIBs) are one policy instrument that mobilizes private finance into national opportunities. However very little is known about the political decisions behind the establishment and design of these banks. Taking an exploratory approach, we analyse the parliamentary discourse behind the establishment and design of the UK's Green Investment Bank and Australia's Clean Energy Finance Corporation. We find that the debate on GIB establishment focused on arguments related to high-level policy goals and the role of the state. The debate on GIB design focused on technology target sectors, tasks and tools to be implemented, and organizational aspects. We find a difference in political controversy levels with Australia's debates displaying distinct partisanship on all debate topics, whereas the UK's debates displayed clear consensus on the majority of debated topics. We also find that debate on higher-level establishment concepts, especially the role of the state, received more attention in Australia, whereas in the UK there was greater discussion of design concepts, namely organizational aspects. We derive propositions on the politics of GIBs beyond our two cases, and conclude with an agenda for future research.

The evolution of ideas in global climate policy

From carbon pricing to green industrial policy, economic ideas have shaped climate policy. Drawing on a new dataset of policy reports, we show how economic ideas influenced climate policy advice by major international organizations, including the Organisation for Economic Cooperation and Development and the World Bank, from 1990 to 2017. In the 1990s, the neoclassical notion of weak complementarity between environmental protection and growth dominated debates on sustainable development. In the mid-2000s, economic thought on the environment diversified, as the idea of strong complementarity between environmental protection and growth emerged in the green growth discourse. Adaptations of Schumpeterian and Keynesian economics identified investment in energy innovation and infrastructure as drivers of growth. We thus identify a major transformation from a neoclassical paradigm to a diversified policy discourse, suggesting that climate policy has entered a postparadigmatic period. The diversification of ideas broadened policy advice from market-based policy to green industrial policy, including deployment subsidies and regulation. This analysis of global climate policy reports shows how economic ideas have shaped climate policy. The authors find a shift from neoclassical dominance to a more diversified discourse, which has expanded policy choices beyond market-based policies to include green innovation and industrial policy.

Economic complexity and the green economy

Which countries are likely to have the productive capabilities to thrive in the green economy? How might countries reorient their existing industrial structures to be more competitive in an environmentally friendly world? To investigate these questions, this paper develops a novel methodology for measuring productive capabilities to the green economy. By constructing a new comprehensive dataset of traded green products and drawing on economic complexity methods, we rank countries in terms of their ability to export complex green products competitively. We show that higher ranked countries are more likely to have higher environmental patenting rates, lower CO2 emissions, and more stringent environmental policies even after controlling for per capita GDP. We then examine countries' potential to transition into green products in the future and find strong path dependence in the accumulation of green capabilities. Our results shed new light on green industrialisation and have a number of implications for green industrial policy.

The EU’s Green Deal: Bismarck’s ‘what is possible’ versus Thunberg’s ‘what is imperative’*

The European Union’s Green Deal, a €1 trillion, 10-year investment plan to reduce greenhouse gas emissions by 55% in 2030 (relative to 1990 levels), has been hailed as the first comprehensive plan to achieve climate neutrality at a continental scale. The Deal also constitutes the Union’s new signature mission, providing it with a new raison d’etre and a shared vision of green growth and prosperity for all. Because the stakes are high, a dispassionate, realistic look at the Green Deal is necessary to assess to what extent it reflects ‘what is politically attainable’ and to what degree it does ‘what is required’ in the face of continuous global warming. This paper considers the ambition, scale, substance and strategy of the Deal. It finds that the Green Deal falls short of ‘what is imperative’ but also of ‘what is politically possible’. By choosing to make the Green Deal dependent on global finance, the European Commission itself closes down all policy space for systemic change as well as for ambitious green macroeconomics and green industrial policies, which would enable achieving climate neutrality in a socially and economically inclusive manner. Hence, Otto von Bismarck would have been as unpersuaded by the Green Deal proposal as Greta Thunberg, who dismisses it as mere “empty words”.

New Features of Green Industrial Policy and the Limits of WTO Rules: What Options for the Twenty-first Century?

This article dissects the distinctive features of twenty-first century green industrial policy and discusses its implications for the World Trade Organization (WTO) system. Focusing on the renewable energy (RE) sector, it submits that both RE subsidies and trade remedies targeting RE technologies have been used as green industrial policy instruments albeit the latter have largely escaped WTO scrutiny so far. After critically assessing the interplay between the ‘green’ and the ‘industrial’ components of both types of measures, this article gives an explanation for the actual trends in WTO RE-related disputes and concludes that, contrary to conventional wisdom, the rise of green industry policy does not as much confront the WTO system with the problem of reserving more policy space that it is currently available for good (‘green’) RE subsidies, but rather with the problem of eroding the larger than optimal policy space that currently exists for bad (‘industrial’) trade remedies targeting RE technologies. Building on this, this article critically assesses the existing calls for reform of WTO rules from a trade and climate change standpoint and advocates for solutions à géometrie variable that could allow for addressing the main shortcomings of both the WTO Agreement on Subsidies and Countervailing Measures and the WTO Anti-dumping Agreement.

Industrial Policy 2016 of Bangladesh: An Assessment from the Green Perspective

Green growth, green energy, and green industrialization have been moved tothe forefront of economic development in the present crux of environmentaldegradation and climate change. Nowadays, different policies are havinggreen features. Literarily, the green policy generally denotes theenvironmental policy, but other policies related to the environment may alsobe green focusing on environmental issues. And his industrial policydeserves a great attention of the policymakers in this regard. TheGovernment of Bangladesh (GoB) has formulated Industrial Policy 2016which has been embedded with several targets conducive to green growthand sustainable development goals (SDGs). As it is not a declared greenindustrial policy, the question has been raised here and attempts toscrutinize that to what extent or whether this policy can promote greenindustries in the obvious socioeconomic condition of Bangladesh. Thisarticle has maneuvered to evaluate this policy through content analysis andfound this policy as an elementary initiative for green industries inBangladesh.

An economic impact evaluation of environmental policy

With the rapid development of the modern economy, the importance of improving energy efficiency and reducing environmental pollution is increasing. Developing an ecological economy is an inevitable course to achieve sustained economic growth. In order to ensure the smooth development of the green economy, the government has introduced a series of environmental protection policies. Meanwhile, a large number of environmental protection and green industries have emerged. However, the economic impact of environmental policies on environmental protection and green industries is difficult to predict. Environmental policy in national level promulgated more frequently, but these policies specifically for environmental protection industry green industry and environmental policy is not much. So the analysis of the process focused on Water Pollution Control Action Plan and public service in-depth promotion of government and social capital cooperation work notice. Results show that the Water Pollution Control Action Plan has a binding effect on the yield of green industries and public service in-depth promotion of government. In contrast, public service in-depth promotion of government and social capital cooperation work notice increases the income of the environmental protection industry, and it has a negative constraint on the green industry.

Managing tradeoffs in green industrial policies: The role of renewable energy policy design

• Policies can face tradeoffs between minimizing costs and creating local industries. • We explore how tradeoffs are managed in Mexico and South Africa's policy designs. • Distinct development logics led to different renewable energy auction designs. • Calibrations of policy instruments can be a key determinant of policy outcomes. • Well-calibrated local content requirements can help foster local industry. Green industrial policies around renewable energy (RE) are growing increasingly prevalent in emerging economy contexts as a means to foster low-carbon industrialization pathways. However, policymakers often face a tradeoff in their policy designs. In this paper, we focus on the tradeoff between minimizing the cost of low-carbon energy generation to fuel traditional input-intensive industrialization strategies, and implementing potentially costly measures to build local industries around low-carbon energy technologies. Specifically, we utilize the cases of Mexico and South Africa to investigate how each country’s distinct prioritization of these two objectives led to a divergence of their RE auction designs and outcomes. Specifically, using data on the involvement of local and foreign actors in Mexican and South African RE projects, policy documents, and interviews with public and private stakeholders in the two countries, we show how each country’s policy design shaped RE market and bid price developments, and the formation of local RE value chains. We find that the prioritization of low-cost RE generation can result in a greater reliance on existing foreign value chains and capital, without building the local capabilities that could result in greater long-term benefits for the market. We further discuss the implications of our results for policymakers, focusing on providing recommendations for RE industrial policy design in general, and the calibration of local content incentives in particular.

English

This paper takes a critical look at Ghana’s one district one factory industrial policy in relation to climate change. This is important because climate variability and change as a result of industrialization can stand as hazard to impending advancement and expansion in Ghana. Industrial policy can contribute significantly to economic, ecological as well as communal sustainability. This paper aim to clarify the need for industrial policy because of climate change as well as to determine its effects on the one-district, one-factory industrial policy in Ghana. A far-reaching work examination was done on detailed comparative account of the role played by industrial Policies due to climate change in development and growth. This search resulted in the selection of four implications namely: international coordination, green industrial policy, energy efficiency and diversifications; and trade policies, which were missing in the 1D1F industrial policy in Ghana.   Key words: Climate change, energy; industrial policy, trade policy, sustainable development

Reclaiming the role of labour environmentalism in Just Transitions

From its inception in the North American labour movement all the way to its inclusion in the Paris Agreement and current level of global proliferation, the concept of Just Transition has reached the pinnacle of global policy debates. Drawing on contributions to the Just Transition Research Collaborative (JTRC) project and a recently published volume1, we highlight the importance of historicising and rooting the Just Transition concept in the frontline communities and unions that are most directly affected and that initially imagined it. This, we believe, is key to ensuring that Just Transition is not simply a fashionable catchword but a concept that actually contributes to a socially just low-carbon transition. Just Transition: The Making and Globalisation of a Contested Concept The Origins of Just Transition: While the term ‘just transition’ was first used in 1995, it was part of an explicit strategy by unions and environmental justice activists in the USA and Canada that can be traced to the late 1980s. Drawing upon the US federal Superfund policy to clean up polluted sites, the Oil, Chemical and Atomic Workers Union suggested a Superfund for Workers in chemicals, weapons, and other toxic industries. The strategy of the union envisioned a robust green industrial policy, strong occupational, health and environmental rights and standards, alongside universal health care and the formation of an independent labour party. During the 1990s, US and Canadian unions promoted the strategy in collaboration with the environmental justice and elements of the environmental movement and in the context of systematic discussions between unions and environmentalists2. Just Transition fell off the US and Canadian union and environmentalist agenda after 2001. The Globalisation of Just Transition: The concept survived, however, because global union organisations, in collaboration with a number of national unions, including in the UK, Spain, Australia and South Africa, globalised the concept from the late 1990s onwards (Rosemberg 2020). The Spanish Comisiones Obreras and the associated Sustainlabour and ITUC, played a critical role in the diffusion of labour environmentalism globally, mainstreaming the Just Transition concept within international climate and environmental debates and processes3. During the Great Recession, when proposals for green jobs and green growth became more popular nationally and amongst intergovernmental organisations (IGOs), these unions sought to ensure that Just Transition remained on the agenda. Just Transitions Everywhere: More recently, the uptake of Just Transition has accelerated. Global climate activists started seeing its value and some transferred it back to their national movements. The ILO adopted its Just Transition guidelines in 2015. The ITUC established the Just Transition Centre (JTC) in 2016 and has pursued close collaboration between labour and sympathetic business (Moussu 2020). Other IGOs are also engaging the concept, as are various philanthropic and civil society organisations. Just Transition policies have been adopted by countries, such as Canada and Spain, by subnational units, such as Colorado and Scotland and by cities, such as Longmont, Colorado, and Jackson, Mississippi (Akuno 2020). C40, the global network of megacities has expressed its commitment to Just Transition. The growing number of references to Just Transition has increased the range of understandings of what it should mean, from more conventional and mainstream corporate social responsibility proposals to more transformative ideas that confront the current neoliberal economic system. A necessary step, therefore, is to identify and reflect on the various meanings and operationalisations of Just Transitions. Unions and Just Transitions Today Despite its union origins, Just Transition remains a contested concept within the world of labour. Some unions, particularly in extraction and construction, oppose Just Transition, due to both concerns over the implications of a transition and ideological reasons. Other unions have engaged the strategy but emphasised the social aspects over the urgency of a green transition. There are good reasons for that when states, business and environmentalists focus on urgency without justice. Overall, Just Transition is high on the agenda of the world of labour and there are many instances of unions debating and promoting Just Transition. These include the New Zealand Council of Trade Unions, various British and US unions and union related initiatives, the Alberta Federation of Labour in Canada, South African trade unions, Australian unions (Snell 2020) and others. But while some unions from the Global South...

The politics of technology bans: Industrial policy competition and green goals for the auto industry

After decades of failure to reduce greenhouse gas emissions in the transport sector, several jurisdictions have in rapid succession announced future goals to phase out sales of internal combustion engine vehicles. This article argues that these announcements are predominantly a form of political signaling in a green industrial policy competition for alternative transport technologies, notably electric vehicles. We show that such signaling games in green industrial policy are likely to emerge when market growth for alternative technologies initiates industrial policy competition, which explains the clustered timing of political signals. A country’s position in the global auto industry, however, shapes the domestic political economy for announcing a phaseout goal. Countries with aspirations to develop export-oriented EV industries seek industrial upgrading; countries with existing export-oriented auto industries promote industrial renewal to maintain international competitiveness; and importing countries pursue phaseout goals primarily for environmental reasons. Our findings suggest that industrial upgraders can induce incumbent producer countries to participate in green industrial policy competition, leading to the “trading up” of energy technology policy goals. This contrasts with classic patterns of environmental policy competition, in which advanced industrialized nations are the pacesetters.