Moving up or standing still? Assessing country positioning in renewable energy value chains

Within the Paris Agreement the international community agreed to limit global warming to 1.5° above pre-industrialized levels; this implies a strong need for a rapid decarbonisation of economies including a full transition of the energy sector towards renewable energy sources. The low carbon energy transition is said to offer numerous opportunities for countries specializing in renewable energy installation, manufacturing, and green technology patent innovation (IRENA 2019, Lachapelle et al., 2017). However, not all policy strategies promise the same dividends: as research on global value chains shows, the economic value added is highest for innovation related activities, whereas manufacturing and installation may offer less added value to the domestic economy. It has therefore been concluded that countries have an interest in diversifying and ‘upgrading’ for their role in renewable energy value chains (Pietrobelli and Rabellotti 2011). The opportunity and direction of upgrading, however, depends on the domestic political economy. In a first step, the present paper assesses how countries strategically position themselves on the renewable energy value chain. We econometrically assess country-level panel data provided by IRENA and Bloomberg New Energy Finance on the instalment, manufacturing and R&D for wind and solar energy technologies between 2008 and 2018. In a second step, the paper offers a comparative policy analysis of four selected country cases, so as to assess how ‘upgrading’ in clean energy value chains relates to public policies. We ask: where do we see ‘upgrading’ happening in global value chains for renewable energy tech? How does upgrading relate to public policies promoting green industrial change and their sequencing? And can technology-policy feedback loops be observed? With this, the paper contributes to the section's debate on the dynamics of change in sustainable energy transitions.