Industrial policy, politics and competition: Assessing the post-crisis wind power industry

Wind power remains one of the fastest growing energy sources in the world, even as countries have struggled to come back from the global economic crisis of 2008. Yet the sector’s rise has been the product of a crucial shift in how governments approach renewable energy. To build political support for wind power, governments have added industrial policy instruments to traditional renewable energy deployment mechanisms. This paper argues that we are witnessing a rise in protectionism in the wind power sector growing out of specific political and economic challenges at the national level that have arisen in the period following the 2008 crisis. In addition, this paper demonstrates that protectionism, justified by a rationale of promoting local economic development, takes many forms, and countries have come up with ever more varied and sophisticated methods of using industrial policy to establish and protect nascent, strategic industries. Finally, it challenges conventional wisdom that protectionism is reserved for the emerging economies as either a strategy to improve economic competitiveness or as a short cut to technological innovation. It demonstrates that while these strategies do indeed persist in emerging economies, North America and Western Europe continue to protect their own wind industries, even as they initiate disputes with countries for implementing similar measures.