Sixteenth International Conference on Environmental, Cultural, Economic & Social Sustainability

Abstract

In the era of anthropogenic climate change, state action towards decarbonization is an urgent, necessary policy priority. However, developing states often lack the necessary capital to implement top down policy for a national energy transition and endogenous renewables growth with existing market capacity and institutional structures. Therefore, states simultaneously striving to industrialize and promote domestic renewables deployment must attract inward FDI from foreign multinationals. However, foreign private sector investment often results in value extraction through export oriented manufacturing, rather than growth in downstream segments of the value chain which promote local market integration and renewable energy provision. Where export oriented industrialization has failed to catalyze innovation, what is the role of industrial policy in facilitating Southeast Asian green technology innovation and deployment? I argue that state supported subnational energy providers and development of a local renewables industry build the foundation for green technology deployment in the face of value extracting manufacturing oriented multinationals. Industrial policy supporting institutional capacity and local market integration creates economic growth and niche downstream niche markets tailored to the needs of specific communities. This paper draws upon theories of industrial upgrading and dynamic comparative advantage to inform public policy for green technology development in a global economy characterized by supply chain fragmentation and complex interdependence.