Malte Schneider

Performance of renewable energy technologies under the CDM

While many different greenhouse gas (GHG) mitigation technologies can be implemented under the Clean Development Mechanism (CDM), renewable energy technologies (RETs), in particular, are often viewed as one of the key solutions for achieving the CDMs goals: host-country sustainable development and cost-efficient emissions reductions. However, the viability of emission reduction projects like RETs is technology- and country-specific. To improve the CDM with respect to the diffusion of RETs, it is crucial to understand the factors that ultimately drive or hinder investments in these technologies. This study develops a methodology based on project-level, regional and global variables that can systematically assess the financial and environmental performance of CDM projects in different country contexts. We quantitatively show how six RETs (PV, wind, hydro, biomass, sewage, landfill) are impacted differently by the CDM and how this impact depends on regional conditions. While sewage and landfill are strongly affected independently of their location; wind, hydro and biomass projects experience small to medium impacts through the carbon price, and strongly depend on regional conditions. PV depends more on regional conditions than on the carbon price but is always unprofitable. Furthermore, we determine the carbon prices necessary to push these six RETs to profitability under various regional conditions. Based on these results, we derive policy recommendations to advance the interplay between international and domestic climate policy to further incentivize GHG emission reductions from RETs.

The Quest for Adequate Technology-Push and Demand-Pull Policies: Country-Level Spillovers and Incentives for Non-Incremental Innovation

How to adequately foster technical change is a highly relevant and intricate question in the arena of policymaking. This study contributes to addressing this challenge, which is especially important in the area of environmental technologies that are subject to market failures. To shed more light on how the policymaker should use the policy archetypes demand-pull and technology-push support, we extend the current literature by addressing two gaps. First, the effect of domestic and foreign demand-pull policies on innovation in a country is addressed. Second, we examine the impact of demand-pull and technology-push on incremental and non-incremental innovation. We analyzed the case of photovoltaic power by combining a descriptive analysis of historic global innovation dynamics and a panel analysis on 15 countries over the period 1978 through 2007 with patent data. Three key findings emerged: First, we show that there are substantive innovation spillovers of national demand-pull policies. Second, demand-pull policies only foster incremental innovation and we find some anecdotal evidence that in phases of rapid induced market growth such policies even disincentivize non-incremental innovation. Third, only technology-push support is able to incentivize non-incremental innovation. Based on these findings, we discuss the need to globally coordinate demand-pull policies to circumvent the innovation-spillover problem and to incentivize non-incremental innovation via increased technology-push funding and design modifications of demand-pull policies.