Latest INNOPATHS publications

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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Beyond the Energy System: Modelling Frameworks Depicting Distributional Impacts for Interdisciplinary Policy Analysis

Since the signing of the 2030 Agenda for Sustainable Development by the United Nations Member States and the Yellow vest movement, it is clear that emission‐reducing policies should consider their distributional impacts to ensure a sustainable and equitable growth compatible with the Paris Agreement goals. To this end, the design of environmental and energy policies should be accompanied by an interdisciplinary analysis that includes potential effects on distinct groups of society (defined by income, age, or location), regions, and sectors. This work synthesizes common modeling frameworks used to assess technical, socio‐economic, and environmental aspects in policy analysis and the recent progress to portray distributional impacts in each of them. Furthermore, the main indicators produced by each method are highlighted and a critical review pointing to gaps and limitations that could be addressed by future research is presented.

Written by Roland Cunha Montenegro, Panagiotis Fragkos, Audrey Helen Dobbins, Dorothea Schmid, Steve Pye and Ulrich Fahl.

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Low-Carbon R&D Can Boost EU Growth and Competitiveness

Research and Innovation (R&I) are a key part of the EU strategy towards stronger growth and the creation of more and better jobs while respecting social and climate objectives. In the last decades, improvements in costs and performance of low-carbon technologies triggered by R&I expenditures and learning-by-doing effects have increased their competitiveness compared to fossil fuel options. So, in the context of ambitious climate policies as described in the EU Green Deal, increased R&I expenditures can increase productivity and boost EU economic growth and competitiveness, especially in countries with large innovation and low-carbon manufacturing base. The analysis captures the different nature of public and private R&I, with the latter having more positive economic implications and higher efficiency as it is closer to industrial activities. Public R&D commonly focuses on immature highly uncertain technologies, which are also needed to achieve the climate neutrality target of the EU. The model-based assessment shows that a policy portfolio using part of carbon revenues for public and private R&D and development of the required skills can effectively alleviate decarbonisation costs, while promoting high value-added products and exports (e.g., low-carbon technologies), creating more high-quality jobs and contributing to climate change mitigation.

Written by Kostas Fragkiadakis, Panagiotis Fragkos and Leonidas Paroussos.

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Patenting and business outcomes for cleantech startups funded by the Advanced Research Projects Agency-Energy

Innovation to reduce the cost of clean technologies has large environmental and societal benefits. Governments can play an important role in helping cleantech startups innovate and overcome risks involved in technology development. Here we examine the impact of the US Advanced Research Projects Agency-Energy (ARPA-E) on two outcomes for startup companies: innovation (measured by patenting activity) and business success (measured by venture capital funding raised, survival, and acquisition or initial public offering). We compare 25 startups funded by ARPA-E in 2010 to rejected ARPA-E applicants, startups funded by a related government programme and other comparable cleantech startups. We find that ARPA-E awardees have a strong innovation advantage over all the comparison groups. However, while we find that ARPA-E awardees performed better than rejected applicants in terms of post-award business success, we do not detect significant differences compared to other cleantech startups. These findings suggest that ARPA-E was not able to fully address the ‘valley of death’ for cleantech startups within 10–15 yr after founding.

Written by Anna Goldstein, Claudia Doblinger, Erin Baker and Laura Díaz Anadón

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Dispossessed by decarbonisation: Reducing vulnerability, injustice, and inequality in the lived experience of low-carbon pathways

This study examines the justice and equity implications of four low-carbon transitions, and it reveals the “lived experiences” of decarbonisation as manifested across Africa and Europe. Based on extensive, original mixed methods empirical research – including expert interviews, focus groups, internet forums, community interviews, and extended site visits and naturalistic observation – it asks: How are four specific decarbonisation pathways linked to negative impacts within specific communities? Relatedly, what vulnerabilities do these transitions exacerbate in these communities? Lastly, how can such vulnerabilities be better addressed with policy? The paper documents a troublesome cohabitation between French wineries and nuclear power, the negative effects on labor groups and workers in Eastern Germany by a transition to solar energy, the stark embodied externalities in electronic waste (e-waste) flows from smart meters accumulating in Ghana, and the precarious exploitation of children involved in cobalt mining for electric vehicle batteries in the Democratic Republic of the Congo. The aims and objectives of the study are threefold: (1) to showcase how four very different vulnerable communities have been affected by the negative impacts of decarbonisation; (2) to reveal tensions and trade-offs between European transitions and local and global justice concerns; and (3) to inform energy and climate policy. In identifying these objectives, our goal is not to stop or slow down all low-carbon transitions. Rather, the study suggests that the research and policy communities ought to account for, and seek to minimize, a broader range of social and environmental sustainability risks. Sustainability transitions and decarbonisation pathways must become more egalitarian, fair, and just.

Written by Benjamin K. Sovacool, Bruno Turnheim, Andrew Hook, Andrea Brock and Mari Martiskainen

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The short-term costs of local content requirements in the Indian solar auctions

Developing and emerging economies are implementing local content requirements to spur domestic manufacturing, though their costs and benefits are not well understood and difficult to quantify. Here, we provide an empirical assessment of the short-term costs of local content requirements using a credible counterfactual. We analyse data on government-run solar photovoltaic auctions held in India between 2014 and 2017 and exploit the fact that not all of the auctioned contracts entailed local content requirements. We find that local content requirement policies resulted in a ~6% per kWh increase in the cost of solar photovoltaic power generated from those projects when compared to similar projects not subject to the same local content requirement policy. During this three-year time period, Indian solar panels remained around 14% more expensive than international panels. We found some evidence of short-term increases in domestic manufacturing capacity, yet during this short period Indian firms did not increase market share or break into export markets.

Written by Benedict Probst, Vasilios Anatolitis, Andreas Kontoleon and Laura Díaz Anadón

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Diffusion of flue gas desulfurization reveals barriers and opportunities for carbon capture and storage

Addressing climate change may require rapid global diffusion of Carbon Capture and Storage (CCS). To understand its potential diffusion, we analysed a historical analogy: Flue Gas Desulfurization (FGD) in the global coal power market. Our findings challenge common patterns: diffusion of FGD is not described by a single S-curve but by multiple steps and does not slow down after materiality. The regulation-driven diffusion of FGD can be fast, especially for retrofit since it does not require new power plants. Owing to the mature size of coal power plants, the diffusion of FGD is driven by unit numbers instead of unit capacity growth. We find that the diffusion of CCS in climate change mitigation pathways, when normalised for economic growth, rarely exceeds the historical maximum diffusion rate of FGD. Our findings suggest that end-of-pipe abatement technology can diffuse fast and to a great extent provided deep, consistent long-term regulatory commitment.

Written by Stijn van Ewijk and Will McDowall

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Global Energy System Transformations to 1.5 °C: The Impact of Revised Intergovernmental Panel on Climate Change Carbon Budgets

The Paris Agreement calls for countries to pursue efforts to limit temperature increase to 1.5 °C. Scenarios that limit global warming to 1.5 °C describe fundamental transformations in energy systems and typically rely on emission reductions combined with carbon dioxide removal (CDR) from the atmosphere, mostly through large‐scale application of bioenergy with carbon capture and storage (BECCS). These options face several difficulties, such as reliance on underground CO2 storage and competition for land with food production. Here, using the PROMETHEUS global energy system model, alternative deep mitigation pathways are explored, in light of the revised carbon budgets specified in the Intergovernmental Panel on Climate Change (IPCC) Special Report on 1.5 °C. The pathways assess the potential contribution of energy efficiency improvements and more rapid electrification of energy services based on renewable energy. Although these alternatives also face specific implementation challenges, they are found to significantly reduce the need for CDR and BECCS, but not fully eliminate it, and offer an effective way to diversify transition pathways to meet the Paris targets. Achieving the 1.5 °C target is technically feasible but requires immediate, ambitious, and global action, based on large‐scale deployment of renewables, early retirement of fossil‐based power plants, accelerated efficiency improvements, and expansion of carbon‐free options in end‐uses.

Written by Panagiotis Fragkos

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Sustainable minerals and metals for a low-carbon future

Climate change mitigation will create new natural resource and supply chain opportunities and dilemmas, because substantial amounts of raw materials will be required to build new low-carbon energy devices and infrastructure (1). However, despite attempts at improved governance and better corporate management, procurement of many mineral and metal resources occurs in areas generally acknowledged for mismanagement, remains environmentally capricious, and, in some cases, is a source of conflict at the sites of resource extraction (2). These extractive and smelting industries have thus left a legacy in many parts of the world of environmental degradation, adverse impacts to public health, marginalized communities and workers, and biodiversity damage. We identify key sustainability challenges with practices used in industries that will supply the metals and minerals—including cobalt, copper, lithium, cadmium, and rare earth elements (REEs)—needed for technologies such as solar photovoltaics, batteries, electric vehicle (EV) motors, wind turbines, fuel cells, and nuclear reactors. We then propose four holistic recommendations to make mining and metal processing more sustainable and just and to make the mining and extractive industries more efficient and resilient.

Written by Benjamin K. Sovacool, Saleem H. Ali, Morgan Bazilian, Ben Radley, Benoit Nemery, Julia Okatz and Dustin Mulvaney.

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The decarbonisation divide: Contextualizing landscapes of low-carbon exploitation and toxicity in Africa

Much academic research on low-carbon transitions focuses on the diffusion or use of innovations such as electric vehicles or solar panels, but overlooks or obscures downstream and upstream processes, such as mining or waste flows. Yet it is at these two extremes where emerging low-carbon transitions in mobility and electricity are effectively implicated in toxic pollution, biodiversity loss, exacerbation of gender inequality, exploitation of child labor, and the subjugation of ethnic minorities. We conceptualize these processes as part of an emerging “decarbonisation divide.” To illustrate this divide with clear insights for political ecology, sustainability transitions, and energy justice research, this study draws from extensive fieldwork examining cobalt mining in the Democratic Republic of the Congo (DRC), and the processing and recycling of electronic waste in Ghana. It utilizes original data from 34 semi-structured research interviews with experts and 69 community interviews with artisanal cobalt miners, e-waste scrapyard workers, and other stakeholders, as well as 50 site visits. These visits included 30 industrial and artisanal cobalt mines in the DRC, as well as associated infrastructure such as trading depots and processing centers, and 20 visits to the Agbogbloshie scrapyard and neighborhood alongside local waste collection sites, electrical repair shops, recycling centers, and community e-waste dumps in Ghana. The study proposes a concerted set of policy recommendations for how to better address issues of exploitation and toxicity, suggestions that go beyond the often-touted solutions of formalisation or financing. Ultimately, the study holds that we must all, as researchers, planners, and citizens, broaden the criteria and analytical parameters we use to evaluate the sustainability of low-carbon transitions.

Written by Benjamin K. Sovacool, Andrew Hook, Mari Martiskainen, Andrea Brock and Bruno Turnheim

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