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| Srl | Item |
| 1 |
ID:
191329
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| Summary/Abstract |
Rather than by an invisible hand, many industries are kick-started by a government policy. Despite little robust evidence, local content requirements are increasingly used to incentivize domestic manufacturing if imports are cheaper. To examine the effect of local content, we explore an unintended quasi-policy-experiment. Starting in 2013, the Indian government simultaneously held solar auctions with and without local content, providing an otherwise unobserved counterfactual. We digitize the results from the 41 auctions worth 8.65 billion $ in solar module demand and collect annual revenue and solar patents of the 113 participating firms between 2004–2020. For causal identification, we compare winners of local content with similar open auction winners in a staggered difference-in-difference estimation. While we observe an insignificant increase in the same and the following year after firms win LCR auctions, overall, we find winning local content auctions does not significantly increase firms’ solar patents or sales. We identify three reasons why the policy did not create stronger, lasting effects. First, local content did not create sufficient production to enable learning by doing. Second, local content did not generate enough revenue for re-investment into R&D. Third, local content reduced competition in auctions. The analysis underlines the predicament countries face as open auction winners, despite having won 9 times as much capacity, do not patent much (more).
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| 2 |
ID:
140726
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| Summary/Abstract |
There is under way a worldwide greening of industry, driven by the huge demand generated by China and India as emerging industrial giants whose growth cannot be accommodated by ‘business as usual’ fossil-fuelled development—for reasons having as much to do with energy security as concerns over global warming and climate change. While the role played in this process by fiscal and industry policies (e.g. carbon taxes and other market-based incentives) is well understood (even if not pursued currently in Australia), the potentially powerful leverage to be exercised by trade policy is under-recognised. There are some positive developments such as a proposed Environmental Goods Agreement being discussed in Geneva, while there are negative developments embodied in various bilateral and regional trade agreements such as the proposed Trans-Pacific Partnership (TPP) agreement, to which Australia has committed itself. There are rising levels of conflict over trade and climate change mitigation measures, in actions brought at the WTO against countries looking to promote green industries through measures like local content requirements being attached to foreign direct investment, or by countries imposing border tax adjustments against exporters who allegedly fail to implement carbon taxes. The issues involved are discussed in this paper and possible ways forward are proposed, along with some implications for Australia.
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| 3 |
ID:
168697
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| Summary/Abstract |
By contrast to the common objective of decarbonization of electricity production, the main driver of Russia's renewable energy policy is to achieve the economic benefits related to the manufacturing of green equipment. The focus on industrial development rather than the decarbonization of the power sector clearly appears from the decision of the Russian government to tie renewable energy subsidies to stringent local content requirements. In particular, solar energy benefits from a subsidy regime that is favourable to local manufacturers. Based on a detailed analysis of Russian renewable energy regulation, this paper studies the benefits for solar generation and explains this favourable treatment based on the vested interests of influential industrial groups in the solar PV manufacturing sector. These vested interests helped to overcome the resistance to renewable energy in an economy heavily dependent on oil and gas. More fundamentally, the influence of the local solar energy industry enabled the development of a support scheme that eventually stimulated the deployment of renewable energy technologies in general.
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