Seeding an Energy Technology Revolution in the United States: Re-conceptualising the Nature of Innovation in ‘Liberal-Market Economies’

Abstract

This article aims to contribute to comparative capitalisms debates about the nature of the so-called liberal-market economy/coordinated-market economy divide by drawing attention to the extent and nature of the developmental state apparatus being deployed in Washington's efforts to develop markets for novel climate and energy technologies. Against the deluge of literatures in comparative capitalisms debates which suggest that liberal market economies typically breed 'radical' innovation cycles based on the relative absence of states, internal corporate hierarchies, and competitive market arrangements, this article uses a regulationist framework to understand how critical tensions and contradictions inherent to liberal market economies serve to engender new forms of direct state intervention, particularly within the innovation process. Building on Block's (2008) concept of a 'hidden developmental network state' emerging in Washington beginning in the late 1970s, this article explores the tensions that have led to the use of such developmental policies in the climate and energy realms, and provides a description of how these policies function.

The developmental state in global regulation: Economic change and climate policy

“…Strategic agency in regulatory politics extends beyond regulators and regulated businesses to include developmental actors and agencies. It thus complements recent analyses that highlight the role of the developmental state in environmental governance (MacNeil, 2013; MacNeil and Paterson, 2012; Schmitz et al, 2015).…”

“…For instance, in the US, the developmental apparatus is highly decentralized, including a wide range of agencies such as the Department of Defense and the National Institutes of Health (Block, 2008). Such a neo-developmental network state is also prevalent in the US energy sector (MacNeil, 2013; Meckling and Nahm, 2017). In China, the developmental state is fragmented and rests on state–business alliances at various levels of policymaking (Nahm, 2017; Nölke et al, 2014).…”

“…Green industrial and innovation policy — through research and development support, subsidies, tax cuts, tariffs, and other industrial policy measures — has since attracted the attention of scholars (Aggarwal and Evenett, 2012; Craig, 2014; Jänicke, 2012; Karp and Stevenson, 2012; Rodrik, 2014; Zysman and Huberty, 2014). Importantly, research demonstrates how the US developmental state has expanded its activities to promote low-carbon technologies in order to address climate change, while regulatory action failed (MacNeil, 2013; MacNeil and Paterson, 2012; Schreurs, 2012). The Japanese state also redeployed parts of its developmental state apparatus to transform the energy sector (Hughes, 2012).…”

Trump, US climate politics, and the evolving pattern of global climate governance

“…71 This has been the case for renewables as well, with Washington funding the lion's share of the basic research that has underpinned the industry since the 1970s. 72 These investments often take years to bear fruit (indeed, Washington's investments in fracking took more than twenty years to show results), but today's R&D investments will be crucial for developing the technologies that will allow the world to sprint towards a net-zero carbon economy by mid-century. This will require ramping up R&D investments across a range of sectors, including for example, aviation, electric vehicles, industrial processes, alternative food proteins, agricultural processes, waste and recycling, and renewables and storage.…”

Developmental Environmentalism

“…103 To the extent that the United States has sought to embark upon an NRE transition, that strategy appears to have had variable momentum in line with fluctuating US energy production, and little systematic coordination at the national level-a situation unlikely to change in the near future. 104 Of course, as our framework is drawn from a single country case, we offer it-modestly and tentatively-for the purposes of starting a debate rather than finishing one. But we also point out that the practice of generating frameworks from single country cases is not unprecedented.…”