The deployment of renewable energy (RE) is increasing around the world, driven in part by the global climate commitments that have been adopted by almost 200 countries under the Paris Agreement. It is therefore important to understand how countries are adopting national strategies to promote green growth through RE development and, in particular, the role of “green industrial policies.” Industrial policies include a variety of protectionist measures that encourage domestic manufacturing for RE and raise barriers to foreign entry into domestic markets, setting up an inherent tension between low-carbon development and international trade. This chapter reviews the policies and incentives commonly used to support RE deployment as well as the localization of RE manufacturing. It then turns to a review of the green industrial policy strategies of the Chinese wind sector and the Indian solar sector—two examples of using green industrial policy with different outcomes. While green industrial policy helps states justify the low-carbon transition, it also potentially makes that transition costlier and more inefficient. The chapter ends with recommendations for ongoing policy discussions including the need for continued engagement about how to best foster clean energy innovation, rapid technology deployment, and economic development with a shared vision that does not leave emerging and developing countries behind.
