Towards technology-smart green industrial policy

Abstract

Industrial policy has experienced a global resurgence, including within the energy sector. Unlike traditional trade-based interventions, modern green industrial policies (GIP) primarily incentivize the domestic innovation, manufacturing and deployment of novel low-carbon energy technologies. Despite the multi-billion dollar financial stakes involved, selecting successful technologies (‘winners’) in advance remains surprisingly understudied. Here, I propose a framework to identify winners from a global competition and a domestic competitive advantage perspective. I build on insights from recent innovation literature, to argue that structural (and thus inherent) technology characteristics can be used to identify likely winners at early stages of the technology cycle. The framework presented here can serve as heuristic for decision makers tasked with the hard question of which specific technologies to support. Rather than relying on early-stage market prices or hype cycles, this framework provides a more structured basis for evaluating technologies and designing green industrial policy mixes. The talk will be based on the following paper but also include a preview into ongoing research: Schmidt, T. S. (2026). Towards technology-smart green industrial policy. Nature Energy, https://rdcu.be/fBeIu.