An integrated policy for innovation for the environment

1
An integrated policy for innovation for the
environment
Paper for 6 Countries Programme
conference Innovation Policy and Sustainable
development How can innovation policy incentives
make a difference? Brussels, febr 28 and march 1,
2002.   René Kemp
2
Findings from evaluation research show that

• Innovation policy is poorly aligned to societal
  goals
• The additionality of subsidies policies is small
  they encourage companies to do research in a more
  elaborated way, or to do it earlier, but a great
  deal of projects would be done anyhow (free rider
  effect)
• environmental policy hardly pulls innovation

3
The limited additionallity of innovation support
for environmental technology (figures from
Germany)
4
Ways to foster innovation for the environment
Through the use of programmes of system
innovation offering sustainability benefits in
areas where system innovation is needed The
setting of long-term goals and targets To make
sure that there is a constant pressure for
innovation To phase out support for existing
technologies
5
The need for system innovation
Public policy should be more oriented towards
system innovation offering sustainability
benefits giving the constraints and barriers for
this type of change the costs of changeover,
uncertainty and the need to break old ties and do
away with old practices Regime actors are
unlikely to be working to system innovationwork.
For regime actors system innovation is
disruptive, which causes them to look for other
solutions. We need to widen the search process
and engage in experimentation and the real use
with alternative solutions The programmes should
be time-limited and flexible in order not to
create white elephants These programmes are
not a substitute for policies to internalise
external costs
6
Examples of system innovation
industrial ecology nanotechnology   hydrogen
economy integrated mobility (or chain mobility)
Integrated water management
7
Market failure and system failure
The cumulative and embedded nature of technical
change means that we are locked into systems and
products that may be suboptimal from a social
welfare point of view. Environmental problems
are not simply market failure problems that can
be rectified by introducing the right
incentives but rather problems of coordination,
i.e., the result of coordination failure The
coordination failure may have to do with the pool
of knowledge, infrastructure, and the
institutional matrix which may be inadequate
8
(No Transcript)
9
Role of government
The role of government in stimulating innovation
for the environment is pluralistic facilitator,
aligner, mediator, controller, and
director Governments should do many things
facilitate change through incentives, enhance
companies capability to innovate
environmentally, remove institutional rigidities,
align interests to public goals, mediate between
conflicts of interest, make sure that policies
are not dominated by vested interests, control
the side effects of old and new technology, and
give direction to processes of change by setting
goals and instituting transition
policies. Policies should fit the context in
which they are used and deal with the pertaining
market or system failure. Policies should not be
based on general arguments of market failure
10
An integrated approach to innovation for the
environment three suggestions

• There is a need for a more integrated approach to
  problems of sustainability
• Ways to achieve this are
• 1. By aligning environmental policy to innovation
  policy through
• Options analysis to inform environmental goals
  and investment
• Strategic niche management to jump start markets
  for sustainable solutions
• Cross-functional agencies and task forces around
  well-defined problems
• 2. Programmes for system innovation
• 3. Contradition monitoring, to identify
  conflicting policies

11
Is system coordination possible?
Possibilities for system coordination are
limited. All what government agencies can aspire
to achieve is increased coherence.
Sociotechnical systems defy control because
they are collective outcomes, not collective
choices. Innovations are part of trajectories and
shaped by social, organizational and
techno-economic factors. Historically however
public policy is found to be important to radical
innovation through its science and technology
policy and by creating a first market (often
military) for radical innovation, which suggests
the use of technological missions but missions
may create monsters or suboptimal solutions.
12
Transition management
is a collective, cooperative effort to work
towards a transition in a flexible, stepwise
manner, utilising dynamics and visions
involves a wide range of policies with their
choice and timing gauged to the particular
circumstances of a transition involves system
innovation and system improvement
Source Kemp and Rotmans (2001)
13
Transition management continued
Transition management consists of a deliberate
attempt to work towards a transition in a
stepwise, adaptive manner, using dynamics in
technology, markets and governance, exploiting,
windows of opportunity. It relies on a
process-based steering philosophy of modulation.
It does not operate on the basis of a blueprint
(greenprint) but uses a set of goals and quality
images. The goals are not fixed and the policies
to further the goals are constantly assessed and
periodically adjusted in development rounds. This
creates some flexibility but maintains a sense of
direction. Transition management offers an
integrative framework for policy deliberation and
the choice of instruments and individual and
collective action. Transition management is not
so much about instruments but more about
different ways of interacting, the mode of
governance, and goal seeking. Innovation and
learning are important aims for transition
management. This requires a greater orientation
towards outsiders, a commitment to change and
clear stakes for regime actors. Through
transition management the transition endeavour to
more sustainable systems is institutionalised. Th
ere is no guarantee of success. It helps to
increase the chance of a transition
14
Why we need transition management

• Because of the interests of incumbent actors in
  the status quo and myopia of markets
• Because public policy is highly fragmented and
  oriented towards short term goalstransitions
  require the coordination of various policy
  fields ST policy, economic policy, innovation
  policy, environmental policy, transport policy
  and agriculture policy
• Because of the need for societal support for
  transition endeavours and for legitimising
  policies towards structural change
• Because a gradual approach is economically not
  disruptive and politically (socially) do-able
•  
• Because it is an approach that works towards
  societal goals in a flexible way paths get
  created in the process, not by choice but through
  the variation-selection mechanism

15
Current policy and transition management
   
2000
2030
Current policy short-term emission targets

2000
2030
Transition management long-term targets and
short-term targets
Source Rotmans, Kemp and van Asselt (2000)
16
Dynamic multilevel perspective on transitions
Source Geels and Kemp (2000)
17
Role of government in different phases
Evaluation and exploitation of windows of
opportunity
Internalisation of external costs
18
Misunderstandings about transition management
Transition management is based on the realization
of technological blueprints Not true it is based
on a set of goals and quality images (visions).
The goals are not fixed and the policies to
further the goals are re-evaluated and
periodically adjusted. This creates some
flexibility but maintains a sense of
direction.   Transition management is the enemy
of control policies Not true it adds something
to such policies a framework and a commitment to
change. One important element of transition
management is the transition agenda and the
political commitment to change.   Transition
management is something consensual Not true the
existing corporatist arrangement is broken up,
and it does not rely on the good behaviour
efforts of incumbent actors. There are stakes and
ultimately winners and losers.   Transition
management will succeed where other policies will
fail Not true it helps to achieve greater
coherence in policy and increases diversity
19
Some statements

1. Conventional innovation is an important source of
   environmental benefit.
2. Innovation policy is less needed for normal
   innovation than for environmental innovation
3. Innovation policy should be more oriented to
   system innovation offering sustainability
   benefits
4. Generic, incentive-based policies are wasteful
5. There is a need for transition programmes