Download publication

Working Paper

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 Topic: Energy & Climate

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.


Warning: Invalid argument supplied for foreach() in /home/bruegelo/public_html/wp-content/themes/bruegel/content.php on line 449
View comments
Read about event More on this topic

Upcoming Event

Jun
7
11:00

Brussels Policy Dialogue: Insights for EU and Member States’ Climate Agenda

The event is a policy dialogue organised under the project, 'COP21: Results and Implications for Pathways and Policies for Low Emissions European Societies'.

Speakers: Artur Runge-Metzger, Oliver Sartor, Marta Torres-Gunfaus, Lola Vallejo and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels
Read article Download PDF More by this author

Book/Special report

Bruegel annual report 2018

The Bruegel annual report provides a broad overview of the organisation's work in the previous year.

By: Bruegel Topic: Energy & Climate, European Macroeconomics & Governance, Finance & Financial Regulation, Global Economics & Governance, Innovation & Competition Policy Date: May 16, 2019
Read about event More on this topic

Past Event

Past Event

How do national energy policies fit into EU decarbonisation plans?

Through considering several different national perspectives, we discuss how to reconcile the EU Climate Strategy targets with national energy and climate policies.

Speakers: Aleksandra Gawlikowska-Fyk, Christian von Hirschhausen, Carole Mathieu and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: May 15, 2019
Read article More on this topic

External Publication

Renewables for Energy Access and Sustainable Development in East Africa

This book, co-authored by Bruegel's Research Fellow Simone Tagliapietra, investigates the role of renewable energy in East Africa to provide policy-relevant inputs for the achievement of a cost-effective electrification process in the region.

By: Simone Tagliapietra, Manfred Hafner, Giacomo Falchetta and Giovanni Occhiali Topic: Energy & Climate Date: May 14, 2019
Read article More by this author

Blog Post

Is an electric car a cleaner car?

An article published by the Ifo Institute in Germany compares the carbon footprint of a battery-electric car to that of a diesel car, and argues a higher share of electric cars will not contribute to reducing German carbon dioxide emissions. Respondents rejected the authors’ calculations as unrealistic and biased, and pointed to a series of studies that conclude the opposite. We summarise the article and responses to it.

By: Michael Baltensperger Topic: Energy & Climate, Innovation & Competition Policy Date: May 13, 2019
Read article More on this topic More by this author

Blog Post

Elections must put Europe on a path to a green future

We are at a pivotal moment for the future of Europe. It is an opportunity to reflect on the fundamental values and visions underlying the European project, and on the future direction of this common journey. Climate change should be at the centre of this reflection.

By: Simone Tagliapietra Topic: Energy & Climate Date: May 8, 2019
Read article Download PDF More on this topic

Working Paper

Estimating the cost of capital for wind energy investments in Turkey

Wind power represents a key component of Turkey’s national energy strategy. Based on data collected on 138 installations in the country, this paper provides an estimation of wind power’s cost of capital in Turkey. This analysis finds that the cost of capital for wind power in Turkey compares with the one of South-east European countries. On this basis, continued governmental commitment to current support schemes for wind power must be considered as crucial to further promote wind power deployment in the country, even if the recent devaluation of the Turkish lira raises the feed-in-tariffs cost for the government.

By: Gustav Fredriksson, Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate Date: May 7, 2019
Read article More on this topic More by this author

Blog Post

Getting better all the time: The benefits of learning for decarbonisation

The technological development will dramatically impact decarbonisation cost. In this blog post, the author suggests that national decarbonisation strategies should put a special emphasis on the benefits of learning.

By: Georg Zachmann Topic: Energy & Climate Date: April 16, 2019
Read about event

Upcoming Event

Sep
4-5
08:30

Bruegel Annual Meetings 2019

Bruegel's 2019 Annual Meeting will be held on 4-5 September and feature the launch of Bruegel's Memos to the new Commission.

Speakers: Vítor Constâncio, Zsolt Darvas, Maria Demertzis, Ottmar Edenhofer, Bas Eickhout, Alicia García-Herrero, Mathew Heim, Korbinian Ibel, Pascal Lamy, Mark Leonard, Erik F. Nielsen, Florence Parly, Jean Pisani-Ferry, Lapo Pistelli, Lucrezia Reichlin, Joakim Reiter, André Sapir, Olaf Scholz, Lorenzo Bini Smaghi, Alexander Stubb, Simona Suriano, Ezequiel Szafir, Laura Tyson, Nicolas Véron, Reinhilde Veugelers, Emmanuelle Wargon, Thomas Wieser, Guntram B. Wolff and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance, Finance & Financial Regulation, Global Economics & Governance, Innovation & Competition Policy Location: Palais des Academies, Rue Ducale 1, 1000 Brussels
Read about event More on this topic

Past Event

Past Event

A new climate strategy for the EU

At a pivotal point in time, three major EU sides come together to discuss the future climate strategy.

Speakers: Silke Karcher, Andrei Marcu, Raffaele Mauro Petriccione, Kathleen Van Brempt and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 19, 2019
Read article More on this topic More by this author

Opinion

An opportunity for natural gas in the eastern Mediterranean

After a decade of false starts, producers should grab the chance to co-operate as exporters.

By: Simone Tagliapietra Topic: Energy & Climate Date: March 12, 2019
Read article More on this topic More by this author

Opinion

The geopolitical implications of the global energy transition

Energy has traditionally played an important role in global geopolitics, contributing to the rise of great powers, the formation of alliances and, in many cases, also to the emergence of wars and conflicts. Every international order in modern history has been based on an energy resource. This piece discusses how the ongoing low-carbon energy transformation could reshape global geopolitics in the future.

By: Simone Tagliapietra Topic: Energy & Climate Date: March 7, 2019
Load more posts