The GGKP's Seventh Annual Conference took place on 21-22 October 2019 in conjunction with the Global Green Growth Institute’s Global Green Growth Week 2019 (GGGW2019) on the theme of “Achieving Global Energy Transformation” in Seoul, Republic of Korea.
Fabian Stöckl presented his paper “Clean vs. Dirty: Is Substitutability the New Efficiency?” in Session A.1: Pathways to the Green Energy Transition. Stöckl is a Research Associate at the German Institute for Economic Research and a PhD candidate at the Berlin Institute of Technology. His research interests include climate policy and energy economics.
1) Briefly describe the topic and conclusion of your research.
In my research, I analyse the fossil-fuel transition to renewables based on an economic perspective. Specifically, the green growth model developed in this research explicitly accounts for the possibility to invest in new technologies that allow to fully decarbonize an increasing number of processes. The modeling of such new and disruptive innovations extends the traditional approach in economics which builds on ever-increasing efficiency in the use of fossil fuels, thereby violating thermodynamic laws. Most importantly, the analysis shows that cheap renewables are sufficient to trigger a full and permanent decarbonization of economic production. Moreover, this decarbonization approach predicts a complete shift of economic activity towards clean businesses.
2) What are the key policy messages/implications?
The analysis shows that the innovation decreasing the cost of renewables directly incentivizes research enabling the decarbonization of an increasing number of production processes. A similar effect on the development of decarbonization possibilities can be reached through a tax, increasing the costs of fossil fuels. For instance, cheap PV and wind power foster research on storage technologies such as batteries or hydrogen. Temporal research shows that subsidies and carbon taxes are sufficient to initiate a transformation, after which clean energy will be costs optimal even without taxes and subsidies. Finally, the incentive to invest in research on green technologies is positively dependent on the size of the respective market.
3) If applicable, briefly elaborate on the policy framework and financing mechanism.
As technology, which is at the core of my research, is a non-rival and potentially public good, there are large positive global externalities of national research policy.
4) Are there any challenges you would like to underline from this research?
Potential free-riding may detain firms and policymakers from investing, thereby resulting in suboptimal research activity.
5) What are the opportunities for collaboration around this issue?
Assessing the scope of potential national returns to research investment is key. This allows the ability to identify fields where research pays off even in the case of free-riding. In a subsequent step, international coordination and cooperation across countries with a similar profile of local conditions and challenges may lower the national cost of innovation policies.
6) Which session(s) are you interested in attending at GGKP7 and why?
All, because all matter and play an important part in shaping our future.