Shifting our fossil-fuelled civilisation to clean modes of production and consumption requires deep transformations in our energy and economic systems. Innovation in physical technologies and social behaviours is key to this transformation. But innovation has not been at the heart of economic models of climate change. This paper reviews the state of the art on the economics of innovation, applies recent insights to climate change. The core insight is that technological innovation is a path-dependent process in which history and expectations matter greatly in determining eventual outcomes.
In the face of increasingly likely dangerous climate change, many developing countries are designing green economy or low-emissions development strategies, but are simultaneously on a course of investment locking them into high-emission infrastructure. Meanwhile, many high-income countries are working to reduce their emissions but are hampered by the cost of switching from an existing capital stock designed for a fossil fuel-based economy. This paper looks at economic aspects of the challenge of escaping carbon lock-in using a “brown-green capital” model. In the model, brown capital is more productive than green capital in a brown capital-dominated economy, while green capital is more productive in a green capital-dominated economy; that is, the model allows for “carbon lock-out”. The paper also explores possible macroeconomic consequences of policies to drive a transition to a low-carbon economy and policy responses in the case that macroeconomic imbalances result.
This paper presents an overview of trade among the G14 as well as key non-G14 economies in the 54 product sub-categories included in the APEC environmental goods list. It also examines for these 54 sub-headings more detailed trade information at the tariff line level (including at the level of more detailed statistical codes) in an attempt to gain some insight into the relative importance of trade in environmental goods. It also analyses additional climate-related products, derived inter alia from earlier ICTSD research, particularly climate technology mapping studies, which could potentially be added to those included in the APEC list for subsequent inclusion in an Environmental Goods Agreement (EGA). The paper presents a preliminary analysis of trade flows and tariffs for this non-exhaustive list of climate-relevant products and components. Finally, it also puts forward proposals on measures needed to make EGA negotiations more transparent as well as facilitate better estimates of global trade flows in environmental goods.
This paper, produced through the New Climate Economy Cities Research Programme, focuses on one central aspect of urban development: transport and urban form and how the two shape the provision of access to people, goods and services, and information in cities. The more efficient this access, the greater the economic benefits through economies of scale, agglomeration effects and networking advantages. This paper discusses how different urban accessibility pathways impact directly on other measures of human development and environmental sustainability. It also presents the enabling conditions for increasing accessibility and low-carbon mobility in cities.
This paper, produced through the New Climate Economy Cities Research Programme, identifies three groups of cities that will be particularly important for the global economy and climate: Emerging Cities, Global Megacities and Mature Cities. When combined, these 468 cities are projected to contribute over 60 per cent of global GDP growth and over half of global energyrelated emissions growth between 2012 and 2030 under business as usual. Furthermore, this paper reviews the contribution of small urban areas to economic growth and carbon emissions. Finally, this paper explores the potential of the 3C model to maximise the benefits of urban growth while minimising the costs in emerging cities, global megacities and mature cities, and reviews examples of cities where elements of the model have already been implemented.
This paper considers the extent to which the Northeast Asian countries - China, Japan, South Korea, and Taiwan - are collaborating as a legitimate group to produce “green” R&D. Forcing a revision of traditional institutional analysis, such collaboration efforts can overlap with existing policies of regional coordination, but they can also pave the way for future, formal coordination efforts. Employing a mixed methods approach which triangulates data based on expert interviews as well as green patenting output over the last 33 years, it is confirmed here that the presence of the Northeast Asian environmental regime is strongly associated with the development of green R&D among countries in the region. It can be further confirmed that Northeast Asia is on the cusp of becoming a genuine counterweight to the existing dominance of the U.S. and Western Europe.
The paper examines the significance of social policy towards growth of a green economy with particular reference to South Africa. As such, the roles identified are that social policy: constructs ideological foundations which enhance growth of a green economy, promotes efficiency of green economy advancement, improves competitiveness of green economy emancipation and enables sustainability participation required of private firms and financial entities thereby enhancing establishment of a green economy when adopting economic market policies. Further, the paper outlines specific recommendations which are essential towards constructing a green economy by developing an efficient social policy in South Africa.
This policy brief looks at the impacts of environmental regulations on regulated companies. It presents an overview of what competitiveness means, at the level of firms, sectors and countries; and explains how competitiveness effects occur, why it is important to assess them and how they are measured. The main focus of the policy brief is a review of the exisiting evidence. The authors focus on ex post evaluation studies. Ex ante modelling studies are not included. They discuss the impact of environmental regulations on productivity, employment, trade, industry location and innovation. And they conclude by discussing what the literature teaches about improving environmental regulations and identifying priorities for future research.
Key findings from the policy brief include:
In the first dispute on renewable energy to come to World Trade Organization (WTO) dispute settlement, the domestic content requirement of Ontario’s feed-in tariff was challenged as a discriminatory investment-related measure and as a prohibited import substitution subsidy. The panel and Appellate Body agreed that Canada was violating the GATT and the TRIMS Agreement. But the SCM Article 3 claim by Japan and the European Union remains unadjudicated, because neither tribunal made a finding that the price guaranteed for electricity from renewable sources constitutes a ‘benefit’ pursuant to the SCM Agreement. Although the Appellate Body provides useful guidance to future panels on how the existence of a benefit could be calculated, the most noteworthy aspect of the new jurisprudence is the Appellate Body’s reasoning that delineating the proper market for ‘benefit’ analysis entails respect for the policy choices made by a government. Thus, in this dispute, the proper market is electricity produced only from wind and solar energy.
