Daniel Aldana Cohen, University of California, Berkeley; Jan Dutkiewicz, Harvard Law School
Abstract for paper under preparation to be presented at the 2022 SASE mini-conference on the Political Economy of Climate Change.
This paper intervenes in debates in economic sociology and political economy over how to characterize the diverse modes of innovation-oriented climate governance pursued by governments and corporations in the past twenty years. In a heuristic grid, the paper contrasts what we term “Smithian” and “Schumpeterian” logics on the horizontal axis, and “orthodox” versus “democratizing” on the vertical axis.
On the horizontal axis, the Smithian logic focuses on governments adjusting prices, while treating firms as a black box; the theory is that by getting the prices right, the market’s competitive dynamics will automatically generate new innovations that will yield profit-making activities conducive to decarbonization. The Schumpetarian logic focuses on governments and financiers (working collaboratively, or not) channeling investments into specific emerging sectors, or even specific firms, to subsidize technological innovations (as well as business model innovation) that will assist with decarbonization. The former approach accuses the latter approach of “picking winners,” and often ending up picking losers. Defenders of the latter approach, like Mariana Mazzucato, point out that it was always thus, failures are inevitable and trivial in the grand scheme of things, and governments should now self-consciously take up this role with specific attention to climate.
On the vertical axis, we contrast orthodox and democratic variations of these approaches; in short, by examining how different permutations of these approaches favor policy regimes designed to be consistent with prevailing inequalities of power, or whether they attempt to generate greater equity. Our interest is specifically in the possibilities of a “Democratic Schumpetarian” approach. We consider policy approaches like expanded STEM education, the roles of public colleges and universities, the role of public finance, the role of open IP, different political arrangements for steering and governing green investments, and so on. We suggest that policies fleshing out this quadrant could advance both deep decarbonization and equity.
We illustrate our conceptual framework through brief discussions of the development of solar energy and cellular agriculture (ie, laboratory meat); and brief discussions of their possible futures. In discussing solar energy, we highlight the prominent role of public subsidies to university research that facilitated solar energy technology, as well as subsidies to support deployment, which in turn subsidized manufacturing (eg, Germany’s feed-in tariffs which subsidized China’s initial solar panel manufacturing). In the case of cellular agriculture, we examine how public investment (eg in the Netherlands) allowed for the research and development of early prototypes and how public investment and support in some countries (eg Israel and Singapore) is creating the conditions for novel knowledge and production ecosystems of “alternative protein” to emerge. In each case, we examine tensions between green capitalism as usual, and the future prospects for more democratic pathways for green innovation. We conclude by arguing that this framework helps elucidate tensions and social struggles across a range of green economy sectors.