Energy efficient and low-carbon technology in process industries: Innovation, diffusion and the role of public policy

This paper addresses the role of public policy in influencing technological innovation and diffusion in the energy-intensive process industries (e.g., pulp and paper, iron and steel etc.). We highlight in particular technologies that either reduce the industry´s energy use or imply lower process emissions of carbon dioxide. This research scope is motivated due both to its societal relevance and the fact that it raises a number of important scientific challenges and controversies. Specifically, the paper discusses the role of two different theoretical perspectives for orienting the analysis of issues in technology policy: the neoclassical and the evolutionary approaches. The overall objectives of the paper are to: (a) provide a conceptual comparison of these theoretical approaches and their implications for the role and the design of policy intervention; and (b) discuss some relevant implications for spurring innovation processes by examining the experiences of two existing policies and one future technological challenge (CCS) in the Swedish process industries.