Policy synergies and trade offs for low energy innovation

There has been an increasing interest in policy mixes in innovation studies. While it has long been acknowledged that the stimulation of innovation involves different types of policy instruments, how such instruments interact and form policy mixes has only recently become of interest. An area in which policy mixes are particularly important is the field of sustainability transitions. Transitions imply not only the development of disruptive innovations but also of policies aiming for systemic change. Ideally policy mixes for transitions might include elements of ‘creative destruction’, aiding sustainability niches to gain ground while destabilising existing unsustainable regimes.

Further context:

There are two important contexts which have highlighted the need for and have shaped this research project. One is that in policy terms the emergence and diffusion of low-energy innovations is desirable for emission reductions, but this is only one of a variety of policy goals. For example, energy policies are also designed to maintain security of supplies, to keep energy affordable for consumers and industry, and also focus on the economic opportunities afforded by the development of low carbon technologies. These other goals may have synergies with carbon mitigation (e.g. reduced energy demand might lead to increased energy security) but they might also produce important trade-offs (e.g. low energy innovations might be too costly for poor consumers, effectively furthering energy inequality). Recent UK policy and media discussions about rising energy prices, ‘price freezes’ and the government’s review of green taxes on energy bills (which covers for example the costs of the energy company obligation) highlight these tensions. This suggests that the analysis cannot exclusively focus on policies aimed at fostering low-energy innovation but these have to be analysed in a wider energy policy context.

Second, while the issue of policy mixes, which might contain incoherent and inconsistent instruments and goals, has received quite some attention in the policy studies literature for some time (e.g. Howlett and Rayner 2007, Kern and Howlett 2009), there is now also an emerging debate about policy mixes in an innovation studies context (e.g. Flanagan, Uyarra et al. 2011; Borrás and Edquist 2013; Magro and Wilson 2013; Rogge and Reichardt 2013). While it has for long been acknowledged that the stimulation of innovation might involve a number of different types of policy instruments, the issue of how such instruments might interact and form (in)coherent policy mixes has only relatively recently been discovered as being of interest to this community. We argue that an area in which coherent policy mixes are particularly important is the field of sustainability transitions. This literature has received increasing interest in the context of innovation studies but goes beyond mere innovations, examining change at the level of socio-technical systems from the perspective of improvements in environmental sustainability (Markard, Raven et al. 2012). Transitions imply not only the development of innovations but also of policies and policy frameworks aiming for systemic change. In practice, this kind of redesign of policies is challenging, because it presents a contradictory ideology to that of traditional innovation policy focused on economic growth. Innovation policy mixes for transitions might include elements of ‘creative destruction’: aiding sustainability niches to gain ground while simultaneously also stimulating processes inducing the destabilisation of existing unsustainable socio-technical regimes. Therefore, we propose that policy mixes favourable to sustainability transitions need to involve both policies aiming for the ‘creation’ of new and for ‘destroying’ the old. The project will therefore develop a novel conceptualising of policy mixes for low-energy transitions.

Aims and research questions

The aims of this project are:

a)      To identify policy goals and instruments which potentially foster or obstruct the emergence and diffusion of low-energy innovations in the areas of mobility, heat, and electricity use;

b)      to analyse these existing policy mixes by identifying gaps, complementarities, synergies and trade-offs and explain their development over time;

c)       to inform other projects within the Centre and synthesise policy-relevant insights across Centre projects and research themes.

The research questions are:

1. To what extent to current UK energy policy goals and instruments add up to a coherent policy mix suitable for fostering transitions towards low energy systems?
2. How can the emergence and change of policy mixes over time be explained?
3. What impact does the current policy mix have on target groups?
4. Are there ways in which synergies can be improved and trade-offs be avoided within such policy mixes?