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About this book

A comprehensive examination of the inability of liberal capitalism to generate the technological innovations necessary to prevent dangerous climate change. The case is made for the need for institutional evolution to drive the climate innovation, and the potential for climate innovation in an increasingly economically interconnected world.

Table of Contents

Frontmatter

An Introduction to Climate Innovation

1. An Introduction to Climate Innovation

Abstract
The international negotiations for reducing greenhouse gas (GHG) emissions conducted under the purview of the United Nations have garnered much attention, both in the press and in the scholarly literature. However, the results of these negotiations have delivered little and global GHG emissions continue to rise. After Copenhagen, it became clear to all but the most optimistic that an effective global political agreement to mitigate climate change is very unlikely. If the past is a guide to the future, it seems more likely than not that future international negotiations will also fail. This point is made by authors such as Giddens (2011: 208), who notes that hopes for an effective international agreement rest largely on ‘an illusory world community’. The efforts of the handful of nations that are the key GHG emitters are of particular importance, because whether or not negotiations succeed and an international agreement emerges, it will be their national governments that face the challenge of implementing policies to meet GHG emission reduction targets.
Neil E. Harrison, John Mikler

Institutions that Influence Climate Innovation

2. Institutions that Influence Climate Innovation

Abstract
Because of continuing political opposition to effective climate policy, the United States (US) is committed to mitigating climate change primarily through technological innovation. The challenge it now faces is how to stimulate innovation of those technologies that would be most effective at reducing its GHG emissions without reducing economic growth or personal freedom. Technological innovation is generally accepted as a primary constituent of economic growth (Romer, 1986; Solow, 1957) and the Obama Administration used nearly 10 percent (or more than $60 billion) of the funds from the American Recovery and Reinvestment Act of 2009 on various initiatives to stimulate green energy production.1 Not only is technological innovation considered the primary tool to meet the US’s non-binding target to reduce its GHG emissions by 83 percent from 2005 levels by 2050, but it also is seen as a solution to potential economic stagnation (Mikler and Harrison, 2012). This highlights the puzzle we are concerned with here: how do institutions support or undermine the climate innovation that is necessary in liberal capitalist economies? In this chapter we build a theoretical framework that categorizes the institutions that potentially impact the required technology innovation decisions.
Neil E. Harrison, John Mikler

The National Context of Climate Innovation

Frontmatter

3. Climate Policy, Energy Technologies, and the American Developmental State

Abstract
Over the past three decades, the United States (US) economy has produced an enviable record of high-tech innovation in industries ranging from information technology, to biotech, medical engineering, semiconductors, software, telecommunications, and defense. While this record has long been acknowledged and celebrated, attempts to understand the roots of this success have often been confounded by misguided conceptions about the institutions responsible for facilitating it. One particularly influential narrative (commonly referred to as the Varieties of Capitalism framework) has generally sought to attribute the American style and capacity for high-tech innovation to its supposedly liberal form of market economy, in which relatively unfettered markets provide the conditions necessary to promote rapid and disruptive technological changes across the economy. This chapter begins from the assumption that this general fetishization of market forces impairs our ability to properly understand the American state’s role in high-tech innovation generally, and climate innovation specifically.
Robert MacNeil

4. Colorado’s New Energy Economy: Ecological Modernization, American-Style?

Abstract
During his Administration (from January 2007 to January 2011) Colorado Governor Bill Ritter pursued a ‘New Energy Economy’ (NEE) strategy, one of the most ambitious and far reaching attempts at reorganizing the economy of a state in recent times. In this chapter we argue that the NEE was an attempt at ecological modernization (EM), rather than a set of ad hoc initiatives, because it sought to fuse innovation, economic and environmental goals through the political leadership of an activist state at the head of an alliance of environmentalists, industry and other societal forces. This strategy brought together and was shaped by sub-federal and federal forces and included and promoted a number of institutional innovations towards climate change, innovations that have been and continue to be the subject of serious political contestation both at the state and national levels.
Stratis Giannakouros, Dimitris Stevis

The Corporate Context of Climate Innovation

Frontmatter

5. The Role of Corporate Scientists and Institutional Context: Corporate Responses to Climate Change in the Automobile Industry

Abstract
Corporations are critical players in the worldwide effort to address greenhouse gas (GHG) emissions. They account for the vast majority of them, while also controlling the technological and organizational resources which, if applied appropriately, could play a major role in reducing GHG emissions. The science, technology and society (STS) literature examines the interface between science and policy and suggests that scientific knowledge and social structures of governance are coproduced, and that the boundaries between policy and science are inherently ambiguous and subject to continuous renegotiation (Kerkhoff and Lebel, 2006). The private sector, however, has generally been neglected in this debate. Although there has been some growing recognition of the role of private actors such as corporations in international environmental regimes (Clapp, 1998; Haufler, 1998), little attention has been paid to the role of the private sector at the science- policy interface. Yet, this role can be critical in the policy making process (Ehrlich, 2006).
David Levy, Sandra Rothenberg

6. Corporate Investment in Climate Innovation

Abstract
As the majority of technological innovation is generated in the private sector, albeit supported by government funding, it is broadly accepted that climate change mitigation depends on corporate decision-making (Newell and Paterson, 2010). What incentives would persuade firms to generate the necessary incremental and radical technologies? The answer is usually along the lines of ‘getting the prices right’ by taxing greenhouse gas (GHG) emissions; introducing market-based systems to trade GHG emission rights; and subsidizing the creation and diffusion of new low-emitting technologies. Such policy prescriptions spring from a particularly liberal conception of capitalism in which markets solve economic coordination problems, and this is evident in both Australia and the US. In Australia, market mechanisms were the main policy option for GHG emission reductions debated for over a decade before a price on carbon, or a ‘carbon tax’, was ultimately introduced in 2012 (Crowley, 2013; Christoff, 2013). In the US, a strong undercurrent of neoliberal ideology similarly frames all social, environmental, or economic challenges in terms amenable to market solutions (see also McGee’s analysis in Chapter 8).
Neil E. Harrison, John Mikler

7. US Labour Unions and Climate Change: Technological Innovations and Institutional Influences

Abstract
Despite their decline over the last three decades US unions in the private sector remain one of the most significant and organized segments of US society. Without their support effective climate policy will be very difficult to reach and, even more so, to implement. Yet, there remain deep differences amongst unions on climate policy ranging from opposition to strong support. That variability is to be expected given the variable position of unions within the US economy as well as their own organizational and political characteristics. The two questions animating this chapter are: What kinds of technological climate innovations have US unions advanced and what strategies have they adopted in order to induce firms to adopt these innovations? Are any of their proposals profound enough both as innovations and in terms of protecting the climate or are they rear-guard efforts to protect a declining membership? Second, what institutional factors help explain the variability towards technological climate innovations and associated strategies evident amongst unions? In particular, are their choices largely determined by external institutional factors or is there evidence that, while these factors exert an influence, unions are purposeful actors that can choose from a range of strategies?
Dimitris Stevis

Climate Innovation Across Borders

Frontmatter

8. The Influence of US Neoliberalism on International Climate Change Policy

Abstract
The United States is home to the world’s largest economy. It is also the second largest national emitter of greenhouse gases (GHGs), contributing nearly 20 percent of yearly global emissions (US EPA, 2013). In per capita terms, US GHG emissions rank amongst the highest of the developed countries (Garnaut, 2008: 55). It has long been clear that effective international governance for reducing GHG emissions will necessarily require significant US participation. The US has been a leader in researching the science of climate change through sponsoring research within its high quality university and government research institutions and making contributions to the United Nations scientific body in climate science, the Intergovernmental Panel on Climate Change (IPCC). However, wider US engagement with the international climate change institutions has been significantly less positive. During the early 1990s the first Bush Administration was active in negotiations to form the first overarching international agreement on climate change, the 1992 United Nations Framework Convention on Climate Change (UNFCCC). During these negotiations the US successfully opposed initiatives such as the inclusion of a system of internationally negotiated, legally binding targets and timetables for countries to reduce their GHG emissions. Instead, the US advocated that each country pursue their own domestic goals, strategies and/or programs for reducing emissions (Bodansky, 2001: 29). Despite some support for binding targets and timetables during negotiations for the 1997 Kyoto Protocol, the US position on targets and timetables has largely been one of ongoing resistance.
Jeffrey McGee

9. Varieties of Capitalism and US versus Chinese Corporations’ Climate Change Strategies

Abstract
While climate change is global in its impact, its historical origins are in the world’s major industrialized states, and they together with those that are industrializing are now its major contributors. This is why authors like Giddens (2011) have noted that casting the problem of climate change as fundamentally ‘global’ in nature abstracts from the geopolitical realities. The US and China in particular stand out for their contribution to the problem. They are both the world’s largest economies and the two top greenhouse gas (GHG) emitting states, accounting for 40 percent of total GHG emissions in 2009 (World Bank, 2013a). Relatedly, there have been studies of the strategic responses by corporations to environmental issues. Of course, environmentalists and social groups often argue that profit-maximization oriented multinational corporations (MNCs) care little about the environmental consequences of their activities. But even if challenges in implementing environmental strategies persist, their environmental behavior has been presented more positively from strategic international business (Rugman and Verbeke, 1998a, b; Kolk and Pinkse, 2008) and integrative management-stakeholder relationship perspectives (Bansal and Roth, 2000). These studies, and others building on them, have enriched our understanding of the environmental responsiveness of corporations and highlighted the pressures on firms caused by market dynamics, environmental regulation, and societal expectations (for example, Bansal and Roth, 2000; Delmas and Toffel, 2008; Murillo-Luna et al., 2008; Darnall et al., 2010).
John Mikler, Hinrich Voss

10. Institutional Complexity in European Union Climate Innovation: European and National Experiences with Off-Shore Renewable Energy

Abstract
The influence of political and social institutions on business decisionmaking for the development and adoption of technological innovations has formed an increasingly important area of discussion among scholars interested in understanding the reasons for national differences in the direction and pace of innovation in response to societal challenges (Hall and Soskice, 2001a; Hancke, 2009; Nelson and Nelson, 2002). As Harrison and Mikler explain in Chapter 1, the influence of regional and national institutions on innovation processes is particularly evident in the case of developing technologies to mitigate climate change because of the manifold challenges involved in aligning scientific, policy and business priorities sufficiently to support the instigation, testing and commercialization of new greenhouse gas (GHG) reducing technologies. The greater difficulty, of course, lies in unravelling how such institutions and governance processes operate for different types of innovation, in different countries, and during different phases of innovation in order to arrive at a clearer view of the cause-and-effect relationships that determine whether or not innovations prosper or fall by the wayside. How satisfactory is it, for instance, to utilize the lens of liberal market and coordinated market economies (LMEs and CMEs) proposed by the Varieties of Capitalism (VOC) approach (Crouch, 2005b) compared with examining the political, social, economic and cultural institutions influencing climate innovation in individual countries and markets (Castree, 2006; Laurie, 2005)?
Ian Bailey

11. Conclusion: A Way Forward

Abstract
This book is founded on three premises. First, we accept the scientific consensus that the Earth’s climate is changing due to global warming caused by human activities that have resulted in too many greenhouse gas (GHG) emissions from the combustion of fossil fuels. Climate change should, if possible, be mitigated. Secondly, we assume that the countries that are the major emitters of GHGs will continue to organize their political economies as some distinct variety of capitalism, and that liberal capitalism is one of these. All states, including liberal capitalist states, cannot easily choose to alter the institutions that underpin their variety of capitalism. Thirdly, we accept that the governments of these states would more readily mitigate climate change if they could avoid regulating social activity or harming economic growth. In short, the puzzle this book has addressed is how to mitigate dangerous climate change within a capitalist economy without significantly changing the socio-economic system or retarding social welfare.1
Neil E. Harrison, John Mikler

Backmatter

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