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Accepted Paper:
Is green industrial policy a contradiction?
Jostein Hauge
(University of Cambridge)
Given the contradictions in existing frameworks of green industrial policy, I propose a new theory of green industrial policy. This theory combines traditional perspectives on industrial policy, emerging perspectives on green industrial policy, and perspectives from the degrowth paradigm.
Paper long abstract:
Existing frameworks of green industrial policy focus on how the state can steer the economy towards heavier use of clean energy and, more broadly, towards net zero emissions. In this paper, I argue that these existing frameworks have paid insufficient attention to the literature on limits to growth, especially the emerging degrowth paradigm. This paradigm highlights how ecological sustainability is incompatible with constant growth in energy use and resource use. Seeing that traditional industrial policy encourages economic growth and productivity growth, green industrial policy, in turn, relies on growth in energy use and resource use. In this sense, green industrial policy (as presented in existing frameworks) is a contradiction — at its core, it is not truly green.
I propose a new theory of green industrial policy that incorporates traditional perspectives on industrial policy, emerging perspectives on green industrial policy, and perspectives from the degrowth paradigm. My new theory of green industrial policy — green industrial policy 2.0 — puts heavier emphasis on reduction in energy and resource use and ecological justice compared to existing frameworks. In particular, it adds three new policy dimensions: (1) target and scale down ecologically damaging industries and activities, (2) incentivise community-centred living rather than individual-centred living, (3) focus scale-down measures at those responsible for ecological breakdown (e.g., the rich and the global North rather the poor and the global South).