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Green exports and the global product space: Prospects for EU industrial policy

We test if and where industrial policy to promote ‘green’ industry development can improve competitiveness in export markets. Proponents of ‘green growth’ have argued that domestic promotion of ‘green’ energy will generate improved comparative advantage in export markets for high-technology goods such as wind turbines or solar cells. If this holds depends on if domestic […]

By: and Date: May 21, 2011 Energy & Climate Tags & Topics

We test if and where industrial policy to promote ‘green’ industry development can improve competitiveness in export markets. Proponents of ‘green growth’ have argued that domestic promotion of ‘green’ energy will generate improved comparative advantage in export markets for high-technology goods such as wind turbines or solar cells. If this holds depends on if domestic market expansion can, on its own, support firm competitiveness abroad.

We find evidence that industrial policy may work for wind turbines, but we find no evidence that it works for solar cells. Furthermore, domestic renewable energy promotion is more likely to translate into improved international competitiveness if a country already possesses skills, technologies, and industrial sectors closely related to the sector in question. By locating the wind turbine and solar cell sectors in the global product space of traded goods, we are able to show that, net of historical competitiveness and domestic market size, green industrial policy functions best when capitalising on pre-existing industrial capacities, rather than trying to create them.

Finally, our finding that policy appears to work for wind turbines but not solar cells may reflect the greater tradeability of solar cells, which may mean that expansion of domestic demand leads to more imports rather than expanded domestic production. While this paper suggests conditions under which green industrial policy might prove effective in economic development, it makes no claims about whether this represents an efficient approach to either growth or emissions reduction. This evidence recommends caution in using economic growth and competitiveness arguments as the primary justification for investments in renewable energy.

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External Publication

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Climate policy in China, the European Union and the United States: Main drivers and prospects for the future

China, the European Union (EU) and the United States (US) are responsible for the majority of global emissions of greenhouse gases, and produce about half of global GDP. Hence, their climate policies not only determine the success of global efforts to curb future emissions of greenhouse gases, but also affect policy developments in other countries. The aim of this report is to assist policy-makers, climate change negotiators and analysts to understand the domestic constraints and opportunities facing each jurisdiction, and to identify areas of common interest or concern between the three jurisdictions.

By: Augustin Lagarde and Georg Zachmann Topic: Energy & Climate Date: December 6, 2016
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Blog Post

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Simone Tagliapietra

OPEC's revival or swan song? First evidence from financial markets

On Wednesday, 30 November 2016, OPEC reached a milestone agreement to cut oil production by 1.2 million barrels a day in a long-awaited attempt to end the savage two-year downturn in prices that has shredded the budgets of its members. The deal will come into effect in January 2017 and it will mark a U-turn from the pump-at-will policy adopted by the group in November 2014.

By: Enrico Nano and Simone Tagliapietra Topic: Energy & Climate Date: December 2, 2016
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Policy Contribution

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Going local: empowering cities to lead EU decarbonisation

Decarbonisation and digitalisation are reshaping the European energy system, which will become more decentralised and interconnected with other sectors. Cities have the opportunity to be the key drivers of decarbonisation, but this will require the implementation of a new bottom-up governance system. This paper outlines a four-step mechanism in order to achieve decarbonisation at city level.

By: Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate Date: November 30, 2016
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Blog Post

Simone Tagliapietra
Georg Zachmann

How to put cities at the heart of EU clean energy plans

As the European Commission releases its new energy package, “Clean Energy for all Europeans”, our authors argue that cities are the key to success. They propose a new governance mechanism where cities develop and implement ambitious City Climate Plans – with direct monitoring and financial support from the EU.

By: Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate Date: November 30, 2016
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Opinion

Simone Tagliapietra

Più energia alla cooperazione

L'attuale crisi migratoria e gli altri devastanti postumi delle cosiddette “Primavere arabe” illustrano in modo tragico, ma chiaro, la necessità di un nuovo approccio di cooperazione da parte dell’Europa nell’area del Mediterraneo. L’Europa deve urgentemente ripensare le proprie politiche nell’area, al fine di contribuire in modo concreto e sostenibile allo sviluppo economico dei Paesi sud: l’unico vero rimedio strutturale alle attuali problematiche.

By: Simone Tagliapietra Topic: Energy & Climate Date: November 24, 2016
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Blog Post

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Clean Energy for all Europeans

Speech by the European Commissioner for Climate Action and Energy, Miguel Arias Cañete, at Bruegel on 24 November 2016

By: Miguel Arias Cañete Topic: Energy & Climate Date: November 24, 2016
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Past Event

Past Event

Unpacking European Energy Policy

At this event the European Commissioner for Climate Action & Energy, Miguel Arias Cañete, presented an important energy package.

Speakers: Miguel Arias Cañete, Siobhan Hall, Guntram B. Wolff and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: November 24, 2016
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Blog Post

Simone Tagliapietra

President Trump: what next for global climate action?

The new Trump presidency might now signal a U-turn in the United States’ international climate policies.

By: Simone Tagliapietra Topic: Energy & Climate Date: November 9, 2016
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Podcast

Podcast

Decarbonisation and climate change: looking ahead

Decarbonisation plays a crucial role in the fight against climate change. What progress has been made so far, and what are the challenges ahead?

By: Bruegel Topic: Energy & Climate Date: November 8, 2016
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Working Paper

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Providing efficient network access to green power generators: A long-term property rights perspective

This paper analyses the dynamic efficiency of several types of access regulation of a bottleneck transmission line in electricity markets.

By: Georgios Petropoulos and Bert Willems Topic: Energy & Climate, Innovation & Competition Policy Date: November 2, 2016
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Past Event

Past Event

Towards a zero-carbon and digital energy system: which policy challenges for Europe?

Decarbonisation and digitalisation: two mega trends that will change the European energy system.

Speakers: Alissa Decarbonnel, Michael Grubb, Jean Jacques Marchais, Mark van Stiphout and Simone Tagliapietra Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: October 27, 2016
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Opinion

Simone Tagliapietra
Georg Zachmann

Decarbonisation: a future fiscal headache for europe?

Energy taxes contribute significantly to public budgets in the EU, but with the aim to reduce greenhouse emissions, the EU will have to fully decarbonise its energy system. However, taxing green energy poses a significant challenge, which could result in a tax revenue gap. Before this becomes a reality, European governments must start looking for alternative sources of public finance.

By: Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate Date: October 25, 2016
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