MIP 4.3 The politics of industrial decarbonisation policy

The politics of industrial decarbonisation policy

IDRIC Project MIP 4.3

Background

Industrial decarbonisation policy seeks to address a number of technical and economic challenges in reducing industrial emissions. However, like all policy it is also the outcome of a political process, and creates new political dynamics.

Interest groups form coalitions to deploy ideas to try to influence outcomes, constrained or enabled by the institutional context for policy making. A range of actors have diverse interests in industrial decarbonisation policy, including: foundation industries; new technology firms; fuel, technology and infrastructure providers (e.g. in areas such as CCUS, hydrogen, bioenergy); consumers, taxpayers and workers, both in general and in particular regions. In theory, government seeks to balance these interests in designing policy; in practice policy will also reflect the political importance of different interests and how organised and effective interest groups are in putting their views.

At the same time, policy outcomes distribute resources and powers across these groups, and through path-dependence help create pathways of decarbonisation. These developments can in turn create political risks.

Dr Matthew Lockwood

Principal Investigator
Science Policy Research Unit, University of Sussex Business School:

Project Team

Team:

University of Sussex Business School:
Dr Marc Hudson, Research Fellow

Aim

The aim of the project is to provide an analysis of the political dynamics of industrial decarbonisation (ID) policy process in the UK, both in general and in relation to the Industrial Clusters Mission (ICM). The project will look at two issues:

The factors explaining the co-evolution of the cluster approach and the key infrastructure policies (carbon capture, use and storage (CCUS) and hydrogen) at the core of the current strategy
The four inter-related dimensions of the politics of the ID strategy: i) the politics of technology advocacy coalitions; ii) the distributional politics of policy costs and benefits across industry, taxpayers and consumers; iii) the distributional politics of policy benefits across regions and industries, and iv) the local politics of infrastructure.

The project aims to identify potential political risks arising from the strategy, and recommend strategies for mitigating these.

CCUS POLICY TIMELINE:

More Detail

The evolution of the industrial decarbonisation cluster approach:

Clusters play a key role in ID strategy over the 2020s
This workstream examines the origins and evolution of the cluster approach, looking across two dimensions
Linkages across policy issues
- Linkage across issues (e.g. climate policy to industrial policy) by ‘policy entrepreneurs’ and politicians shapes the nature of policies
- We have identified 5 relevant policy areas that have been linked to produce the industrial decarbonisation clusters approach: climate policy, energy policy, industrial policy, innovation policy and regional policy (Figure 1a)
- This process built on several earlier linkages: energy and climate policy from the late 1990s; climate, industrial and innovation policy from 2016 (Clean Growth Strategy, Industrial Strategy), and regional, industrial and innovation policy from 2018 onwards
Linking processes have also been affected by macro-political developments, including Brexit
Clusters as a novel UK approach, but research from innovation and industrial symbiosis literature suggests certain potential challenges (Vernayet al 2018; Kosmoland Otto 2020)

Politics of the industrial decarbonisation strategy

Unlike earlier clusters in 2000s regional policy, industrial decarbonisation clusters have a core component of shared infrastructure, i.e. CCUS and hydrogen, with blue hydrogen also requiring CCUS
History of CCUS important for understanding the current approach (Figure 1b)
Policy learning (from point-to-point to network; CfD auctions for revenue mechanism)
Core technology advocacy coalition, with changing commercial deployment context and actors – coal-fired power generation to gas-fired power generation to industrial decarbonisation and blue hydrogen
Methodology and data sources
- Focus on complex relationships between actors in institutions deploying ideas and involving the use of power, so a qualitative case study is an appropriate methodological approach (Ercan and Marsh 2016)
- ‘Process tracing’ methodology (Beach and Pedersen 2013) seeking to identify entities that undertake activities that lead to outcomes that in a counterfactual would not plausibly otherwise happen