Environmental Policy and Renewable Energy Equipment Exports: by Henning Diederich

By Henning Diederich

This thesis investigates the relationship among environmental law, technological innovation, and export competitiveness in renewable power gear in keeping with a wide pattern of 225 built and constructing nations from 1990 to 2012. The empirical research yields powerful assisting facts for the narrowly robust Porter speculation in addition to for the lead marketplace conception. the consequences recommend that environmental legislation drives innovation and export volumes in sun- and wind-power-related items. this is often relatively the case for well-crafted (i.e. market-based, output-oriented, and transparent) tools equivalent to carbon buying and selling regimes. furthermore, the knowledge convey that early adopters of renewable power help regulations profit most.

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Notably, this change took place in a fast growing market. Annual renewables additions increased fourfold from 30 GW in 2004 to 121 GW in 2013. Overall, the global renewable energy capacity increased from 923 GW in 2004 to 1,560 GW in 2013. ). These data illustrate that the group of renewable energies is very heterogeneous. While hydro power is an established power generation technology with a large installed base and moderate growth rates, wind and solar are newcomers characterized by rather small installed bases but very large growth rates in terms of both cumulative capacity and year-on-year capacity additions.

These developments indicate that China successfully managed to develop an internationally competitive domestic wind power industry. Another interesting case is Denmark which has been a pioneer in wind power with first industrial-scale capacities in the 1970s/1980s. Table 1 shows that the early adoption of wind power in Denmark has translated into a very strong export performance which is maintained until today. Its import volumes, on the contrary, have always been marginal. Worth mentioning, Denmark has historically not been a relevant exporter of energy equipment and does not export significant volumes of any other electricity generation technology.

Hence, additional regulatory burdens on utilities likewise mean economic stimulus for the renewable energy equipment industry. Recent data underline the magnitude of the ongoing changes in the energy sector. Back in 2003, 80% of the newly commissioned power generation capacity in the EU-27, Norway, and Switzerland were still powered by fossil fuels. Within a decade, this picture changed dramatically. In 2013, it were renewable energies which accounted for 72% of capacity additions. This development is not limited to Europe, though.

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