Multi-Problem Challenges for a Renewable Future: Empirical Studies on Competitive Disadvantages from Electricity Price Differentials and Mineral Supply Risk in an Open Economy World

Eva Bartekova, UNU-MERIT

The Paris Agreement is the first-ever universal globally binding treaty on climate change mitigation. As opposed to its predecessors, it advocates a decentralised bottom-up mechanism to emissions abatement, which should assure wider participation by both developing and developed countries. Yet at the same time it also brings about new challenges. This dissertation examines the coordination challenges arising within the decentralised climate change policy architecture, in a world with interconnected systems, heterogeneous national polices and priorities, and distorted markets. This is done using a multidisciplinary and mixed method approach, which allows analysing the problem of coordination from a more holistic perspective and drawing implications within a wider socio-economic, technological and geopolitical context.

First, higher electricity prices for industrial consumers lead to a loss of international competitiveness on country level in terms of attracting foreign direct investment. These economic costs mainly arise from the uncoordinated implementation of environmental policies across countries. Second, inadequate coordination of policies beyond sectoral stovepipes have wide ranging implications on global supply chains. In particular, potential supply shortages of rare earths would largely disrupt the deployment of certain low-carbon technologies, such as electric vehicles. Third, the evidence shows that despite the similar objectives, the foci of rare earth strategies differ across regions. It is thus important to coordinate collective actions at multiple scales within countries, in order to accommodate national interests and domestic circumstances in face of global market distortions.

Taken together, this dissertation argues for a three-dimensional coordination of bottom-up climate change mitigation processes: within national policies, across national policies and beyond sectoral policies. It thus proposes a multilevel and polycentric governance mechanism, advocating an integrated approach to low-carbon energy transition rather than focusing on energy-related greenhouse gas emissions in isolation.

Venue: Aula, Minderbroedersberg 4-6, Maastricht

Date: 27 June 2016

Time: 16:00 - 17:30