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Green Industrial Policy in Europe: Past, Present, and Prospects

Author

Listed:
  • Reinhilde Veugelers

    (KULeuven
    PIIE
    Bruegel)

  • Simone Tagliapietra

    (Bruegel)

  • Cecilia Trasi

    (Bruegel)

Abstract

This paper critically examines the concept of green industrial policy in the context of the European Union (EU) under the European Green Deal—an initiative aimed at achieving climate neutrality by 2050. While the European Green Deal emphasizes climate targets, it did not fully address the economic and social sustainability dimensions of the green transition. The EU, considering the growing concerns over the potential consequences of the United States Inflation Reduction Act (IRA) and China’s assertiveness in the value chains of clean technologies, reassessed its green industrial policy approach in the Net Zero Industry Act proposal. Considering these developments, this study delves into the historical evolution of European industrial policy, evaluates the current proposals presented by the European Commission, and puts forth principles and recommendations for a green industrial policy that can effectively facilitate the green transition within the EU.

Suggested Citation

  • Reinhilde Veugelers & Simone Tagliapietra & Cecilia Trasi, 2024. "Green Industrial Policy in Europe: Past, Present, and Prospects," Journal of Industry, Competition and Trade, Springer, vol. 24(1), pages 1-22, December.
    • Handle: RePEc:kap:jincot:v:24:y:2024:i:1:d:10.1007_s10842-024-00418-5
    DOI: 10.1007/s10842-024-00418-5
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    References listed on IDEAS

    as
    1. Philippe Aghion & Antoine Dechezleprêtre & David Hémous & Ralf Martin & John Van Reenen, 2016. "Carbon Taxes, Path Dependency, and Directed Technical Change: Evidence from the Auto Industry," Journal of Political Economy, University of Chicago Press, vol. 124(1), pages 1-51.
    2. Dani Rodrik, 2014. "Green industrial policy," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 30(3), pages 469-491.
    3. Ralf Martin & Dennis Verhoeven, 2022. "Knowledge spillovers from clean and emerging technologies in the UK," CEP Discussion Papers dp1834, Centre for Economic Performance, LSE.
    4. repec:bre:polbrf:node_8764 is not listed on IDEAS
    5. Philippe Aghion & Julian Boulanger & Elie Cohen, 2011. "Rethinking industrial policy," Policy Briefs 566, Bruegel.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Green transition; Industrial policy; Innovation; EU Green Deal; IRA; NZIA;
    All these keywords.

    JEL classification:

    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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