Latest INNOPATHS publications

Comparing expert elicitation and model-based probabilistic technology cost forecasts for the energy transition

Forecasting is essential to design efforts to address climate change. We conduct a systematic comparison of probabilistic technology cost forecasts produced by expert elicitation and model-based methods. We assess their performance by generating probabilistic cost forecasts of energy technologies rooted at various years in the past and then comparing these with observed costs in 2019. Model-based methods outperformed expert elicitations both in terms of capturing 2019 observed values and producing forecast medians that were closer to the observed values. However, all methods underestimated technological progress in almost all technologies. We also produce 2030 cost forecasts and find that elicitations generally yield narrower uncertainty ranges than model-based methods and that model-based forecasts are lower for more modular technologies.

Written by Jing Meng, Rupert Way, Elena Verdolini, and Laura Diaz Anadon

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Channeling diverse innovation pressures to support European sustainability transitions

Innovation patterns and processes must be aligned, and harnessed and accelerated across multiple domains to address our climate objectives and wider sustainability challenges. In this Perspective, we draw from original case studies on specific technologies and their related innovation systems in agriculture, buildings, electricity, ICT, industry, and transport across Germany, Italy, Poland, and the United Kingdom. Across these innovation systems, the Research Note discusses the technologies, infrastructure, actors, policies and institutions that may lead to, or prevent, successful and unsuccessful technology transitions. We synthesize this diverse evidence to offer five key findings on technology costs and configurations, diversity and multiplicity of actors, diversity of value systems, and countervailing pressures. These insights support the design of effective innovation and decarbonization policies to promote low-carbon transitions.

Written by Elena Verdolini, Benjamin K. Sovacool and Paul Drummond.

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The impact of energy prices on socioeconomic and environmental performance: Evidence from French manufacturing establishments, 1997–2015

This paper evaluates the impacts of large increases in energy prices on socioeconomic and environmental performance of French manufacturing establishments over the period of 1997–2015. We identify energy price effects using a shift-share instrument for establishment-specific prices. Our results highlight trade-offs between environmental and socioeconomic goals: increases in energy prices reduce substantially energy consumption and CO2 emissions, modestly employment and productivity, and have no effects on wages. Energy price impacts are larger in the long-run than in the short-run, except for productivity, as capital deepening exacerbates job destruction but mitigates efficiency losses, and slightly biased towards technicians and against manual workers. Long-term trade-offs remain however limited even for large historical price variation, with a 10% reduction in CO2 emissions costing only 0.9% jobs. While employment effects are bigger in large establishments, negative wage effects emerge for small establishments pointing to different labour market adjustments. Importantly, our results imply that the employment impact of a €56 carbon would be fully concentrated in larger establishments of trade-exposed, energy-intensive sectors.

Written by Giovanni Marin and Francesco Vona

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User innovation, niche construction and regime destabilization in heat pump transitions

Domestic heating systems require a rapid shift to low-carbon options to meet global climate targets. We analyse a heat pump transition in two contrasting case studies: Finland and the United Kingdom, utilizing original data from interviews, document analysis, and archival online data. Finland has an almost completed transition, while the United Kingdom can be considered a stalled one. Building on previous research that has highlighted the importance of context, policy and users in transitions, we explore various user roles within low-carbon transitions, and how they shape processes of niche construction and regime destabilisation. Our findings show that the role of users is one key explanatory element of the different heat pump transitions. We also find that specific characteristics of a transition context can influence the types of users that emerge. We conclude that instead of just providing incentives, policy should also aim to mobilise users.

Written by Mari Martiskainen, Johan Schot and Benjamin Sovacool.

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Volatile Photovoltaics: Green Industrialization, Sacrifice Zones, and the Political Ecology of Solar Energy in Germany

The development of solar energy has been depicted as a paradigmatic break in unsustainable global growth, largely because it is framed as an innovation with minimal carbon emissions. On the contrary, drawing on literatures from spatial justice and political ecology, including on authoritarian populism, this article analyzes the rise and fall of the solar industry and the associated failures of “green industrialization” in Bitterfeld, East Germany—an area that is characterized by political, economic, and social peripheralization, marginalization, and the rise of the far right. The development of solar energy, we argue, is merely the latest iteration of an industrial growth model that is rooted in a similar modernist mode of development. Based on original mixed methods field research in eastern Germany, it argues that many of the same inequalities that characterize fossil fuels and “gray” (de)industrialization—undemocratic and unsustainable industrial processes, the concentration of corporate power and profits, and externalized waste and pollution—are replicated by solar energy. What is distinct is the fact that such contemporary “green” manufacturing processes appear to negatively affect a wider and more dispersed range of spatial locations, also denying these locales the benefits of accumulation, production, and consumption. This unevenness reflects the reconfiguration of global supply chains over the past thirty years and the nature of green production processes that depend on a wider range of inputs that invariably produce localized sacrifice zones. We offer a spatial justice framework for solar energy, zooming in at the manufacturing stage, to explore the multiple sacrifice zones at the different stages of solar energy. Finally, we highlight the politics of resignation that is the product and foundation of capitalist realism that serves to dispossess communities around solar energy manufacturing sites in eastern Germany and might feed into the rise of the populist far right. The article contributes to the emerging critical literature that analyzes the dark side of renewable energy and, in doing so, reveals the social and ecological costs of energy transitions that continue to be underresearched yet deserve heightened attention.

Written by Andrea Brock, Benjamin K. Sovacool and Andrew Hook

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How has external knowledge contributed to lithium-ion batteries for the energy transition?

Innovation in clean-energy technologies is central toward a net-zero energy system. One key determinant of technological innovation is the integration of external knowledge, i.e., knowledge spillovers. However, extant work does not explain how individual spillovers come about: the mechanisms and enablers of these spillovers. We ask how knowledge from other technologies, sectors, or scientific disciplines is integrated into the innovation process in an important technology for a net-zero future: lithium-ion batteries (LIBs), based on a qualitative case study using extant literature and an elite interview campaign with key inventors in the LIB field and R&D/industry experts. We identify the breakthrough innovations in LIBs, discuss the extent to which breakthrough innovations—plus a few others—have resulted from spillovers, and identify different mechanisms and enablers underlying these spillovers, which can be leveraged by policymakers and R&D managers who are interested in facilitating spillovers in LIBs and other clean-energy technologies.

Written by Annegret Stephan, Laura Díaz Anadón and Volker H. Hoffmann

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Who are the victims of low-carbon transitions? Towards a political ecology of climate change mitigation

This study critically examines 20 years of geography and political ecology literature on the energy justice implications of climate change mitigation. Grounded in an expert guided literature review of 198 studies and their corresponding 332 case studies, it assesses the linkages between low carbon transitions—including renewable electricity, biofuel, nuclear power, smart grids, electric vehicles, and land use management—with degradation, dispossession and destruction. It draws on a framework that envisions the political ecology of low-carbon transitions as consisting of four distinct processes: enclosure (capture of land or resources), exclusion (unfair planning), encroachment (destruction of the environment), or entrenchment (worsening of inequality or vulnerability). The study vigorously interrogates how these elements play out by country and across countries, by type of mitigation option, by type of victim or affected group, by process, and by severity, e.g. from modern slavery to organized crime, from violence, murder and torture to the exacerbation of child prostitution or the destruction of pristine ecosystems. It also closely examines the locations, disciplinary affiliations, methods and spatial units of analysis employed by this corpus of research, with clear and compelling insights for future work in the space of geography, climate change, and energy transitions. It suggest five critical avenues for future research: greater inclusivity and diversity, rigor and comparative analysis, focus on mundane technologies and non-Western case studies, multi-scalar analysis, and focus on policy and recommendations. At times, low-carbon transitions and climate action can promote squalor over sustainability and leave angry communities, disgruntled workers, scorned business partners, and degraded landscapes in their wake. Nevertheless, ample opportunities exist to make a future low-carbon world more pluralistic, democratic, and just.

Written by Benjamin K. Sovacool

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Systematic review of the outcomes and trade-offs of ten types of decarbonization policy instruments

The literature evaluating the technical and socioeconomic outcomes of policy instruments used to support the transition to low-carbon economies is neither easily accessible nor comparable and often provides conflicting results. We develop and implement a framework to systematically review and synthesize the impact of ten types of decarbonization policy instruments on seven technical and socioeconomic outcomes. Our systematic review shows that the selected types of regulatory and economic and financial instruments are generally associated with positive impacts on environmental, technological and innovation outcomes. Several instruments are often associated with short-term negative impacts on competitiveness and distributional outcomes. We discuss how these trade-offs can be reduced or transformed into co-benefits by designing research and development and government procurement, deployment policies, carbon pricing and trading. We show how specific design features can promote competitiveness and reduce negative distributional impacts, particularly for small firms. An online interactive Decarbonisation Policy Evaluation Tool allows further analysis of the evidence.

Written by Cristina Peñasco, Laura Díaz Anadón and Elena Verdolini

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Leveraging private investment to expand renewable power generation: Evidence on financial additionality and productivity gains from Uganda

Effectively mitigating climate change entails a quick upscaling and redirection of electricity infrastructure investment towards clean power. Given that the bulk of greenhouse gas emissions increases until 2050 will come from low- and middle-income countries, finding cost-effective ways to mitigate climate change while meeting development targets is essential. However, recent research has shown some of the limitations of broad financing mechanisms, such as the Clean Development Mechanism (CDM) and existing carbon markets. This has resulted in a growing interest in designing novel investment support schemes, such as modifications of feed-in tariffs (FiTs) that may be more cost effective and better targeted towards particular outcomes when compared to traditional deployment subsidies or broad financing mechanisms. We evaluate the design and outcomes of one such novel support schemes: the GET FiT (Global Energy Transfer Feed-in Tariff) investment support scheme in Uganda, which has attracted ~ 453 million USD in private sector investment for 17 small-scale renewable energy projects (solar, hydro, bagasse) in only three years. Using financial modelling on detailed project-level data, we find that most projects were additional and would therefore not have been built without the subsidy. In addition, using firm-level panel data, we show that power outages hamper manufacturing performance in Uganda. In the absence of reliable outage-data for the entire Ugandan territory, we use nightlight variations to proxy changes in outages. We show that outages have declined substantially since the introduction of GET FiT. Yet, our analysis also demonstrates that programmes to incentivise additional renewable generation in developing countries funded internationally or domestically should liaise closely with grid authorities to ensure that supply does not outstrip demand.

Written by Benedict Probst, Lotte Westermann, Laura Díaz Anadón and Andreas Kontoleon

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Reducing the Decarbonisation Cost Burden for EU Energy-Intensive Industries

Carbon leakage features prominently in the climate policy debate in economies implementing climate policies, especially in the EU. The imposition of carbon pricing impacts negatively the competitiveness of energy-intensive industries, inducing their relocation to countries with weaker environmental regulation. Unilateral climate policy may complement domestic emissions pricing with border carbon adjustment to reduce leakage and protect the competitiveness of domestic manufacturing. Here, we use an enhanced version of GEM-E3-FIT model to assess the macro-economic impacts when the EU unilaterally implements the EU Green Deal goals, leading to a leakage of 25% over 2020–2050. The size and composition, in terms of GHG and energy intensities, of the countries undertaking emission reductions matter for carbon leakage, which is significantly reduced when China joins the mitigation effort, as a result of its large market size and the high carbon intensity of its production. Chemicals and metals face the stronger risks for relocation to non-abating countries. The Border Carbon Adjustment can largely reduce leakage and the negative activity impacts on energy-intensive and trade-exposed industries of regulating countries, by shifting the emission reduction to non-abating countries through implicit changes in product prices. 

Written by Panagiotis Fragkos, Kostas Fragkiadakis and Leonidas Paroussos

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