Albert Faber

Survival of the greenest: evolutionary economics and policies for energy innovation

Abstract This paper aims to explore the possible contribution of evolutionary economics to environmental policy-making, in particular with respect to innovations in energy technology. Evolutionary economics offers insights into the mechanisms that underlie innovations, structural changes and transitions, therefore making it of great value in framing policies aimed at stimulating environmental innovations and transitions to sustainable development. The paper identifies ‘bounded rationality’, ‘diversity’, ‘innovation’, ‘selection’, ‘path dependency and lock-in’, and ‘co-evolution’ as the main concepts in evolutionary economics. These concepts are subsequently used to formulate guidelines for designing energy innovation policies. We evaluate current Dutch policies related to energy technologies against this background and examine the development of three particular energy technologies within the adopted evolutionary economics framework, namely fuel cells, nuclear fusion, and photovoltaic cells. We conclude that in order to incorporate the core concepts of evolutionary economics, governmental technology policies should focus more on the diversity of technologies, strategies and businesses, rather than on economic efficiency as the key goal. It is further found that evolutionary concepts conflicting with traditional growth objectives are rarely incorporated in Dutch energy innovation policies.

Evolutionary Economics and Environmental Policy

This study offers a unique evolutionary economics perspective on energy and innovation policies in the wider context of the transition to sustainable development.

Pragmatics of policy: the compliance of dutch environmental policy instruments to European union standards.

Despite a general decrease in Dutch environmental emission trends, it remains difficult to comply with European Union (EU) environmental policy targets. Furthermore, environmental issues have become increasingly complex and entangled with society. Therefore, Dutch environmental policy follows a pragmatic line by adopting a flexible approach for compliance, rather than aiming at further reduction at the source of emission. This may be politically useful in order to adequately reach EU targets, but restoration of environmental conditions may be delayed. However, due to the complexity of today’s environmental issues, the restoration of environmental conditions might not be the only standard for a proper policy approach. Consequently this raises the question how the Dutch pragmatic approach to compliance qualifies in a broader policy assessment. In order to answer this question, we adapt a policy assessment framework, developed by Hemerijck and Hazeu (Bestuurskunde 13(2), 2004), based on the dimensions of legitimacy and policy logic. We apply this framework for three environmental policy assessments: flexible instruments in climate policy, fine-tuning of national and local measures to meet air quality standards, and derogation for the Nitrate Directive. We conclude with general assessment notes on the appliance of flexible instruments in environmental policy, showing that a broad and comprehensive perspective can help to understand the arguments to put such policy instruments into place and to identify trade-offs between assessment criteria.