Green Industrial Policy and the Global Transformation of Climate Politics

The rise of green industrial policy has injected purpose and competition into global environmental politics. Efforts to build green industry have raised the economic and geopolitical stakes of environmental issues as states seek to position their firms in global value chains and reshore strategic industries. This could help to generate the technologies and political momentum needed to accelerate global decarbonization. At the same time, these green interventions confront status quo interests and a variety of brown industrial policies. To help make sense of this new landscape, this introduction to the special issue defines green industrial policy and situates it within domestic political economy, social policy, and global geopolitics. We present six new studies that demonstrate and explore the global politics of green industrial policy. To illustrate the kinds of effects and implications of green industrial policy we are interested in exploring, we show how green industrial policy has transformed climate politics. Changes in state practice, ideas about the environment and economy, and technological cost declines came together to produce a new opportunistic and competitive climate politics. We then identify areas for further investigation as we call for a new climate politics research agenda, integrating green industrial policy more intentionally into studies of global environmental politics.

Energy and the Complexity of International Order

This article explores the role of states and industrial policy in shaping the historical coevolution of energy and international order. I explore how states, by narrowly self-interested pecuniary goals, the desire for geopolitical advantage, and concerns about the political ramifications of domestic economic structure, use industrial policy to encourage the development of energy-intensive transportation and agricultural systems. Over time, increasingly energy-intensive systems allowed an increasingly complex international order to develop, one characterized by significant differentiation and specialization organized over a geographically expansive area. This contemporary complex order is dependent on fossil fuels. I argue that states retain geopolitical and domestic political incentives to use green industrial policy to develop the technologies needed to transition away from this fossil fuel dependence, but industrial policy today faces greater challenges than it did in the past.

Green Industrial Policy After Paris: Renewable Energy Policy Measures and Climate Goals

Renewable energy (RE) will play a significant role in national climate mitigation strategies, including those put forth in the context of the Paris Agreement. This article examines the role of industrial policy in supporting renewables and how it compares to the use of other types of RE policies in both location and quantity around the world. On the basis of an original database of RE policy support measures developed for this analysis, the article illustrates which measures are most commonly being used around the world and what types of countries are using them. It highlights the use of a wide range of policy types, including many industrial policies, and a disparity in the use of industrial policies between smaller emitters and larger emitters, with important implications for which countries stand to benefit from the development of domestic RE industries and for our ability to achieve long-term climate goals.

The Enemy Within? Green Industrial Policy and Stranded Assets in China’s Power Sector

This article examines potential interest group opposition to green industrial policies through the lens of state investment in China’s coal power sector. Using a novel data set on financial investments in Chinese coal power plants, we show that state actors have controlling stakes in the majority of nominally private coal plants. Importantly, the majority of such plants have investments from multiple levels of government. Green industrial policies could therefore face resistance from economic coalitions within the state, as state-owned coal plants and government agencies object to policies that harm their financial interests. Theoretically, this implies the need for a conceptualization of state capacity that allows for the ability to overcome internal opposition. Empirically, we highlight a predicament for the Chinese state: it has set ambitious goals to decarbonize but also has a vested interest in ensuring the profitability of the world’s largest coal-fired power generation fleet.

Green Industrial Policy in Comparative Perspective

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.

China's Race to the Top: Regional and Global Implications of China's Industrial Policy

The paper examines the global and regional implications of China's revitalized state capitalism model through the sectoral lens of the Chinese automotive industry, which stands at the intersection of both traditional and green industrial policy. At the multinational level, China skillfully facilitates local policy implementation that creates excess capacity by propping up local and national champions through convenient compliance with the WTO. At the bilateral level, China closely links purchasing and coercive diplomacy with protections for Chinese players both at home and abroad. Key endeavors like the Belt and Road Initiative open up overseas markets to develop global champions and secure foreign footholds for Chinese champions. Additionally, China's increasing reliance on exclusionary diplomacy provides political justifications to discriminate against foreign competitors within the Chinese market while moving forward with industrial upgrading of domestic players. When linked together, these factors – all byproducts of China's approach to state-led capitalism – combine to explain China's efforts to create a race to the top.