Associate Professor of Public Affairs and Environmental Studies Gregory Nemet emphasized the key role of expectations in innovation during a keynote presentation at the Organisation for Economic Co-operation and Development’s (OECD) Green Growth and Sustainable Development Forum in December. Nemet also discussed how perceptions of policy uncertainty can weaken incentives.
As the keynote speaker for the session “Emerging Technologies and Firm Dynamics,” Nemet focused on the challenges in using public policy to accelerate innovation to support green growth, specifically his research on policy credibility and low-carbon investment. He also discussed work on the technology “Valley of Death,” in which private incentives for investment are weak but in which governments have a poor track record in addressing market failures.
These topics are core aspects of Nemet’s work while on sabbatical in Berlin, Germany. At the Mercator Research Institute on Global Commons and Climate Change (MCC), he is working on the project “Addressing Policy Credibility Problems for Low-carbon Investment.” Nemet and his co-authors are using insights from how credibility problems have been handled in monetary, fiscal and trade policy to inform climate policy.
At the German Institute for Economic Research (DIW), Nemet is working on how to structure public support to address the Valley of Death problem, with a focus on large, established industries that seem particularly challenging to decarbonize: steel and cement. He and DIW colleagues are reviewing a broad set of cases of publicly supported technologies to develop policy guidelines for governing support of large-scale demonstration projects.
The OECD provides a forum in which governments can work together to share experiences and seek solutions to common problems. It promotes policies that will improve the economic and social well-being of people around the world. The conference in Paris examined how to foster the “next industrial revolution” by harnessing the potential of systems innovation policies that support green growth.