Renewable Energy Innovation Policy: A Comparative Institutional Analysis of the European Union and the United States

Abstract

To avoid the most catastrophic effects of global climate change, countries around the world need to rapidly decarbonize their energy systems by deploying current renewable energy sources as well as the next generation of low-carbon technologies. Low-carbon energy sources are the products of innovation systems. The United States (US) and European Union (EU) have robust energy innovation systems that contribute to the development and deployment of renewable energy sources. Many of the institutions in the US’s energy innovation system date back to the 1970s when ambitions of energy independence were heightened by the energy crises of 1973 and 1979. Today, the US spends more on energy research and development than any other nation in the world. Throughout the decades, the US has developed innovative ways to accelerate the commercialization of renewable energy technologies. However, more still needs to be done to strengthen the ties between public research centers, private industry, and academia to foster a more collaborative and efficient innovation system. The EU’s energy innovation system is comparatively modern, having been developed primarily during the previous decade. The EU’s challenge has been to develop an innovation system that complements those of its member states. The EU has been able to reconcile this tension in part by making decarbonization a central tenet of its innovation system. Yet, the EU continues to struggle with the development and commercialization of disruptive next-generation technologies. Both the US and the EU should continue to examine how their multi-level governance structures can be better utilized to aid with the innovation of low-carbon energy sources.