Rent Management: the Heart of Green Industrial Policy

At the heart of green industrial policy is rent management: government creating and withdrawing opportunities for highly profitable investment. This project asks what the key factors are for rent management to succeed.

Drawing on a range of literatures we have dealt first with the critical success factors for 'normal' rent management and then turned to one of the most pressing and controversial issues of our time: how to bring about the transition to renewable energy. This is extra challenging because technological uncertainties are high, time horizons for investment are long, yet action is required now. We suggest that responding to these challenges requires above all a political approach to rent management.

The critical success factors for managing such policy rents are those that enable it to mitigate four risks: political capture by private investors and allied policy makers; choosing the wrong instruments; targeting the wrong sectors or technologies; and doing too little. We conclude that a public-private-civic alliance is needed to deal with the most fundamental risk of governments doing too little and not achieving the scaling up of green investment.

This is a project undertaken jointly with the Department 'Competitiveness and Social Development' of the German Development Institute which has a big programme of work on innovations for ecologically sustainable development.

Key contact

Photo of Hubert Schmitz from Green Transformations Cluster

E: h.schmitz@emeritus.ids.ac.uk

More details

Rent Management – The Heart of Green Industrial Policy

IDS Working Paper 418 (2013)
Schmitz, H., Johnson, O. and Altenburg, T.

Partner organisations

T:
+49 (0)228 94927-0
E:
DIE@die-gdi.de
Website:
http://www.die-gdi.de/en/

Partner researchers

Contact:
Oliver Johnson
Contact:
Tilman Altenburg
Website:
http://www.die-gdi.de/en/tilman-altenburg/
Project Dates:
May 2013
Project Status:
Open
Research Themes / Programmes:
Business and Development Centre
Innovation and value chains
Low-carbon Development