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The "Greening" of Industrial Policy, Headwinds and a Possible Symbiosis

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  • Karl Aiginger

Abstract

The importance of manufacturing for industrialised countries has been reappraised, specifically in the wake of the financial crisis and of China's rise to world no. 1 in manufacturing. A "new industrial policy" should bolster reindustrialisation, different from the old selective and interventionist one, with proposals by academia, by the European Commission and many national policy makers in the USA, UK and France. It should be pro competitive, in line with societal needs, integrated with innovation and regional policy building on competitive strength and with "sustainability at centre stage". Environmental standards should no longer be considered as an obstacle to competitive manufacturing but could constitute a driver of green growth. Europe sets targets for increasing energy efficiency, increasing shares of renewable energy and cutting emission first for 2020 and then for 2050, demanding the reduction of greenhouse gases by 80 to 90 percent, based on new technologies and prices of carbon dioxide of 250 € per ton. Headwinds to this ambitious path come from low gas prices specifically in the USA, based on a new extraction technology and from the breaking down of the European emission trading. The question now raises whether Europe has to cope with low gas prices as to prevent carbon leakage, or whether Europe can stick to the goals of the envisaged integrated and systemic industrial policy as to raise energy efficiency as well as to reduce carbon emissions by new technologies. A "new industrial policy" would match the US cost advantage in energy by closing the technology deficit, improving skills and going for excellence in energy efficiency and clean technologies.

Suggested Citation

  • Karl Aiginger, 2013. "The "Greening" of Industrial Policy, Headwinds and a Possible Symbiosis," WIFO Working Papers 450, WIFO.
    • Handle: RePEc:wfo:wpaper:y:2013:i:450
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    References listed on IDEAS

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    1. Rodrik, Dani, 2004. "Industrial Policy for the Twenty-First Century," CEPR Discussion Papers 4767, C.E.P.R. Discussion Papers.
    2. Karl Aiginger & Susanne Sieber, 2006. "The Matrix Approach to Industrial Policy," International Review of Applied Economics, Taylor & Francis Journals, vol. 20(5), pages 573-601.
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    7. AIGINGER Karl, 2011. "Why Performance Differed Across Countries In The Recent Crisis," Revista Economica, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 55(2), pages 20-27.
    8. Karl Aiginger, 2007. "Industrial Policy: A Dying Breed or A Re-emerging Phoenix," Journal of Industry, Competition and Trade, Springer, vol. 7(3), pages 297-323, December.
    9. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801, October.
    10. Karl Aiginger, 2012. "A Systemic Industrial Policy to Pave a New Growth Path for Europe," WIFO Working Papers 421, WIFO.
    11. Philippe Aghion & Julian Boulanger & Elie Cohen, 2011. "Rethinking industrial policy," Policy Briefs 566, Bruegel.
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    Cited by:

    1. Karl Aiginger, 2016. "New Dynamics for Europe: Reaping the Benefits of Socio-ecological Transition – Part I: Synthesis. WWWforEurope Deliverable No. 11," WIFO Studies, WIFO, number 58791.
    2. Wifo, 2017. "WIFO-Monatsberichte, Heft 12/2017," WIFO Monatsberichte (monthly reports), WIFO, vol. 90(12), December.
    3. Michael Böheim, 2016. "Umweltpolitik als Kernelement einer systemischen Industriepolitik zur Förderung eines nachhaltigen Wirtschaftswachstums," WIFO Monatsberichte (monthly reports), WIFO, vol. 89(1), pages 39-46, January.
    4. Karl Aiginger, 2018. "Neue Anforderungen an Industrie- und Strukturpolitik," WIFO Working Papers 553, WIFO.
    5. Karl Aiginger, 2016. "This Can Still Be Europe's Century," WIFO Working Papers 522, WIFO.
    6. Karl Aiginger, 2017. "Wettbewerbsfähigkeit: vom "gefährlichen" Schlagwort zum Zukunftskompass. Die ökonomische Forschung und der Beitrag des WIFO," WIFO Monatsberichte (monthly reports), WIFO, vol. 90(12), pages 947-953, December.

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    Keywords

    New industrial policy; carbon leakage; climate change;
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