Professors and researchers Marcelo de Carvalho Pereira and José Maria da Silveira are part of the team of the Economics of Energy Innovation and System Transition (EEIST) project, which launches, this Thursday (22), the study "Ten principles for policy-making in the energy transition: lessons from experience". The project is led by a consortium of academics specializing in complexity economics and systems thinking from the United Kingdom, European Union (EU), Brazil, China and India. The project aims to apply new economic approaches to support decision-making on decarbonization policies in partner countries.
According to the report, governments must deliberately use public investment and regulation to rapidly scale up clean energy technologies to reduce costs, achieve global climate goals and boost economies around the world.
The paper, based on a comprehensive analysis of the last three decades of global energy policy, shows that to replicate the notable successes of the energy transition, such as wind power and solar power, governments must go beyond just providing an environment where technologies are left to compete with each other. In fact, they must proactively use all three policy levers (investment, taxes and regulation) to accelerate innovation and cost reduction in clean technologies. The study recommends that governments also target “tipping points” at which clean technologies gain an advantage over fossil fuels, leading to a rapid reallocation of investment.
The proposal contrasts with traditional economic advice. Contrary to some of the advice given to governments over the past 30 years, policy, investment and regulation can reduce energy costs rather than raise them, attract private investment rather than eliminate it, and accelerate innovation and growth. In opposition to the idea that policy should be “technology neutral”, the success of wind power, solar photovoltaics and electric vehicles has been driven by governments that have identified and directly supported such technologies.
The report “Ten Principles for Policymaking in the Energy Transition: Lessons from Experience” provides clear data on how and where policy has stimulated rapid innovation and growth in clean energy technologies since the 1990s. information, the report calls on governments to urgently reshape their approach to the issue in order to accelerate innovation, job creation and cost reduction in the transition from fossil fuels to clean energy.
The findings are consistent with a report from the International Energy Agency, the International Renewable Energy Agency and the United Nations Framework Convention on Climate Change Climate Champions. This report argues that the world could make much faster progress towards global climate goals by coordinating practical actions across each of the economy's emitting sectors, focusing on crossing inflection points at which clean technologies become the most affordable and attractive options. .
About the Economics of Energy Innovation and System Transition (EEIST) Project
The project Economics of Energy Innovation and System Transition (EEIST) is led by a consortium of academics specializing in complexity economics and systems thinking in the United Kingdom, European Union, Brazil, China and India. The project aims to apply new economic approaches to support decision-making on decarbonization policies in partner countries.
The EEIST consortium launched its first report, “New economics of innovation and transition: evaluating opportunities and risks”., at COP26 (United Nations Conference on Climate Change) in November 2021. It is a three-year project, funded by the UK Department for Business, Energy and Industrial Strategy (BEIS) through UK International Climate Finance (funding international climate committee) and the Children's Investment Fund Foundation. The consortium is led by UK-based Exeter University.
The research team involves the following universities and organizations:
- United Kingdom: University of Cambridge, Anglia Ruskin University, University of Oxford, Exeter University, University College London, Cambridge Econometrics, Climate Strategies
- India: The Energy and Resources Institute, World Resources Institute
- China: Tsinghua University, Energy Research Institute, Beijing Normal University for China
- Brazil: Federal University of Rio de Janeiro (UFRJ), University of Brasília (UnB), University of Campinas (Unicamp)
- UE: Scuola Superiore di Studi Universitari e di Perfezionamento Sant'Anna
Observation: The EEIST survey is independent and does not represent the views of the UK government or the governments of partner countries and the EU.
Article originally published on the Institute of Economics website.
