Transcript Slide 1

SCIENCE AND TECHNOLOGY POLICY
INSTRUMENTS FOR ECO-INNOVATION
Directorate for Science, Technology and Industry
Daniel Kupka
28 May 2013, Geneva
Workshop
Standardization and the International
Transfer of Sustainable Technologies
WHY (ECO-) INNOVATION
The need for green innovation
Challenges are so big that we can’t afford expensive
solutions – we are up against time and inertia so need
(lots of) innovation
More than just technological Innovation!
Source: OECD
WHAT ROLE FOR POLICY IN
DRIVING GREEN INNOVATION?
Can the market not solve the problem?
• Market forces provide insufficient incentives for the
development and diffusion of green innovations
Potential Explanations
• Market failure explanations
– Information Problems (e.g. Lack of information, asymmetric
information)
– Energy Market Failures (e.g. dominant patterns , externalities)
– Innovation Market failures (e.g. R&D spillovers)
– Capital Market failures (e.g. liquidity constraints)
• Behavioural failures (e.g. resistance to adapt technologies)
OECD’s Green Growth Strategy
Source: OECD (2011), Towards Green Growth
TOOLS FOR DELIVERING ON
GREEN INNOVATION
Tools for delivering on green innovation
• Getting framework conditions right for innovation - “a rising
tide lifts all boats”
– macroeconomic policy, competition policy, openness to international
trade and investment, fiscal policy, etc.
– General innovative capacity and market conditions are often the most
important determinants
• Getting prices right – “price or market-based-environmental
policies”
– e.g. carbon pricing or cap and trade systems
Getting prices “right” is important…
Swedish NOx tax
Patents increased; emission intensities
declined; Marginal Abatement Costs fell
Swiss VOC tax
Firms were quite innovative and found
many solutions involving changes in
organisational and production practices
that did not result in patenting of technologies
Graph based on: Hoglund-Isaksson
(2005) cited in OECD (2011) Taxation,
Innovation and the Environment; based
on observations from 55 plants in the
energy sectors over the period 19921996
…but not sufficient
• Sometimes difficult to target environmental ‘bad’ directly and
excessive administrative costs
• Range of other ‘non-environmental’ market and system
failures;
• Inertia in the market can favour incumbent firms,
technologies and systems
Tools for delivering on green innovation
• Getting framework conditions right - “a rising tide lifts all
boats”
– macroeconomic policy, competition policy, openness to international
trade and investment, fiscal policy, etc.
– General innovative capacity and market conditions are often the most
important determinants
• Getting prices right – “price or market-based-environmental
policies”
– e.g. carbon pricing or cap and trade systems
• “Dedicated” Science, Technology and Innovation (STI)
Policies
SCIENCE, TECHNOLOGY AND
INNOVATION (STI) POLICIES
FOR GREEN INNOVATION
STI Policy priorities and strategies for
green innovation
• National and ministerial priorities and strategies serve to
catalyse efforts around common goals and visions
• Few take whole government approach on green innovation:
mainly environmental or energy ministries or specific
agencies
– Five-Year-Plan for Green Growth (Korea), Clean Energy Future Plan
(Australia), Ambition Ecotech 2012 (France), Cleantech Masterplan
and Energy Strategy 2050 (Switzerland)
• Expressed through quantitate objectives, sectoral and science
initiatives and various STI policy instruments
– Supply-side policies: generate new knowledge
– Demand side-policies: creating market opportunities
Supply-side technology and innovation
policies
• Funding and management of “green” research at the level of
research institutions
Public spending on energy and
environmental R&D has not kept pace
Source: OECD R&D database
… but green innovation draws on a
broad range of research
Supply-side technology and innovation
policies
• Funding and management of “green” research at the level of
research institutions
• Public support for business R&D
– “targeted” R&D support policies (e.g. US: R&D tax incentives for
energy)
– Support to SMEs and entrepreneurship (e.g. adjusted to green: US
DOE’s SBIR)
– Pizes as incentives for private R&D (e.g. H-prizes)
• Supply of risk capital
Supply-side technology and innovation
policies
• Skills and infrastructures (e.g. European Energy research alliance)
• Networks and partnerships
– Support to Clusters (e.g. Finnish Clean Tech Cluster)
– Support to Strategic Public-Private Partnerships (e.g. Germany’s
Electric Mobility Platform)
• Intellectual property regimes
– Lower application fees, prioritised and expedited examination
– Green Fast Track examination systems in Canada, US, UK,
Japan, Brazil, etc.
Beyond technology-push: Innovation
policies for diffusing green technologies
In fostering markets, in particular in areas where price-based
measures (e.g. carbon taxes) are ineffective or insufficient
• Public procurement of innovation (e.g. performance-based
Green Public Procurement)
• Regulation (i.e “command-control and market-based regl. and standards)
• Standards (limited role for governments)
• Consumer policies (e.g. Green Guides)
• Adaption and deployment policies (e.g. fiscal and financial incentives
for green vehicles, demonstration projects, feed-in tariffs)
– Potential conflict with WTO rules
– Cost-effective?
STI policy at the international dimension
• Coordination and harmonisation of priorities and research
agendas
• Co-operative R&D in international networks and funding
commitments
• International exchange of scientific and technical information
• Closer to market: setting global standards
For developing countries
• The role of adaptive R&D and int. technology transfer to fit
technologies to local conditions
– Disembodied technology transfer ->education and training
– Embodied technology transfer -> funding to cover costs of adaption
(development assistance)
STI POLICY IMPLICATIONS
AND CHALLENGES
Implications for STI policy
• Direct STI policy is necessary, but not sufficient
– Providing a mix of incentives that induce solutions from ‘close-tomarket’ up to ‘breakthrough’
The Need for a Mix of Policies:
The relative impact of different policies
Note: For ease of interpretation elasticities have been normalised such that effect of R&D=1.
Unfilled bars indicate no statistical significance at 5% level.
Source: OECD (2011) Invention and Transfer of Environmental Technologies.
Implications for STI policy
• Direct STI policy is necessary, but not sufficient
– Providing a mix of incentives that induce solutions from ‘close-tomarket’ up to ‘breakthrough’
• Providing policy predictability in conditions of imperfect and
changing information
Clear Policy signals help
Source: Haščič, I. et al. (2010), “Climate Policy and Technological
Innovation and
Transfer: An Overview of Trends and Recent Empirical Results”,
OECD Environment
Working Papers, No. 30 http://dx.doi.org/10.1787/5km33bnggcd0-en
Implications for STI policy
• Direct STI policy is necessary, but not sufficient
– Providing a mix of incentives and policies that induce solutions from
‘close-to-market’ up to ‘breakthrough’
• Providing policy predictability in conditions of imperfect and
changing information
• Breakthroughs emerge increasingly from multi- and
interdisciplinary research
• Apollo- or Manhattan-like projects can suppress innovation
• The effectiveness of depends on strong science-industry
collaborations
Challenges for Policy-makers
• STI Governance
• Directing technological change onto a green trajectory
without being “unduly” prescriptive
Source: IEA (2010), Energy Technology Perspectives
• STI Governance
• Directing technological change onto a green trajectory
without being “unduly” prescriptive
• Building international cooperative solutions for
environmental problems which stretch widely across
space and time
THANK YOU
For further information:
www.oecd.org/greengrowth
or
[email protected]