(THIS ARTICLE IS MACHINE TRANSLATED by Google from Norwegian)
Of: Vegard Velle
Mariana Mazzucato is Professor of Innovation and Research Leader at the University of Sussex, England. Her previous book, The Entrepreneurial State: debunking private vs. public sector myths, was featured by the Financial Times in 2013 as one of this year's books. We have a chat with the researcher.
- Why can't the market forces solve the climate crisis?
“A green development is not just about some solar panels and wind turbines. It is about radical changes in all sectors. The entire economy, including industry, the financial sector and new investments, must be directed in a green direction.
Such large-scale restructuring, which we need because of global warming, has never before taken place on the basis of market players. The market forces are too labile, short-term and risk-averse. Consumers can, of course, be encouraged to have more environmentally friendly behavior, and that can help. But what we need is a holistic change.
There are many attempts in the private sector today to focus on alternative energy, batteries, electric cars or recycling. But what they have in common is that they are too puzzled or develop too slowly. Uncertainty about them means that they do not attract greater funding, and at the same time they are too eager to create a greater demand. Since the changes are too small and too bold, they make no difference to the growth of the economy or the number of jobs.
What we need is therefore a collective boost, and Europe has a large enough market to make a difference if the member states pull together. The problem is that a fundamentalist understanding of the free market – that it is neutral and should remain unregulated – is strong. "
- What is green growth, and how to achieve it?
"We have to get past a number of naive notions: The green transition is not primarily a technical issue of adequate research and development. A green transition is primarily about politics, and requires states' willingness to intervene actively with a visible hand. This then also characterizes the countries that are leading the way in this transition.
In general, the state's role in the process of creating new and exciting products and services is greatly underestimated. The state represents a patient source of funding, which has proven time and time again a necessary prerequisite for the development of new technologies. Not least in the early stages, where there is great uncertainty surrounding the initiative. States have often, based on a vision, been able to make bold innovations – such as transporting humans to the moon – the opposite of what we hear about the state today.
Green entrepreneurship, which politicians love to talk about, is not just about entrepreneurs, venture capital and home-grown inventors. At the bottom must be the willingness and ability of economic operators to accept risk and uncertainty, which you rarely find with risk-averse private investors. Most of the revolutionary innovations
The nuisance of capitalism – from the railroad to the internet, nanotechnology and medical advances – sprang from a state effort. "
- Can you give some examples of successful states?
“In Brazil, Germany and China, states have intervened with an active commitment, and not only as a countercyclical stimulus, but as an active approach to further develop the most innovative, risky and uncertain parts of the green economy.
In Germany, the authorities focused on wind power in the mid-100s. The goal was to reach 1989 MW of wind power by XNUMX. They did this by offering higher than the market price for energy from wind power and by providing tax credits to small-scale wind power generators. Today it is the state investment bank KfW that manages the so-called Energy transition – "climate change".
China's five-year plan for the period 2011-2015 states that the country will invest $ 1500 billion – equivalent to five percent of the gross domestic product – in energy efficiency and environmentally friendly technologies, in biotechnology, a new generation of digital technology, advanced production methods, new materials, alternative energy sources and electric cars.
To promote solar and wind power development, China has set the power prices from these energy sources to a favorable high level. At the same time, companies that develop new technology in this area will be reimbursed for their expenses over a seven-year period, at the same time as they can reap the profits for decades to come. Thus, industry leaders have strong incentives to invest.
The question is whether China is able to continue its economic growth and at the same time cut greenhouse gas emissions. It would then represent a new development in industrialism. ”
"If the Oil Fund was actively used to invest in renewable energy, it could actually make a big difference."
- Is it possible for Norway to change, which has such great incentives and comparative advantages in the oil industry?
"Clearly Norway can change. For example, Singapore changed overnight because of conscious political choices because they decided, not because of comparative advantages.
I think it is strange that a Norwegian state oil fund invests in property, just as if it were a very ordinary private financial fund. If the Oil Fund was actively used to invest in renewable energy, it could actually make a big difference.
Nor am I so impressed with the rainforest initiative, since this is primarily charity. Such a venture is vulnerable to political winds, and can turn overnight with a new political regime. The renewable investment in Denmark is more in the direction I think. Denmark's green initiative is both innovative, large and comprehensive, which makes it far more sustainable over time, since the reorganization does not become so vulnerable to political economic activity.
Finland also shows that it is possible to turn around. The country was one of the least innovative in the XNUMXs, but underwent a shift and became one of the most innovative in the OECD. ”
- We need "a different view of what a good life is". What do you mean?
“My long-term vision is to turn today's productive system into a sustainable green industrial society. Such a society will be able to deliver the goods to the people, while being economically superior to today's society. When the green economy declines, it will also be profitable. New industries will grow out of the shift.
Green growth is about much more than renewable energy sources and lower carbon emissions. From a technological point of view, there are not enough synergies between different renewable energy sources to achieve a green shift. Other societal changes are also needed: conservation, emissions control, less use of materials per product, long-term design, replacing rent with rent, investing in maintenance and recycling, making cities less polluting and better living, revolutionizing transport systems, focusing on health, and strengthen all forms of education – in and outside schools.
In this way we can get a new view of the good life and help shape the dreams of most people. In other words, a green transition means a gradual change in the entire economy, a reversal of today's mass production and consumption patterns, and the introduction of a wide range of innovative changes in production and lifestyle that will expand sustainability and reduce the amount of carbon emissions.
If we are to be able to finance larger government initiatives, the state needs new sources of income. The state should therefore find new ways of taxing. The public sector needs new, large revenue. Therefore, we must be willing to tax sales of financial investments. And the state should get a share of the revenue from successful state investment. "
This text is an abbreviated version of the conversation with Mazzucato, and is also printed on radikalportal.no.
Velle is a journalist, and has served on the board of, among others, the Peace Initiative and the Norwegian Climate Network. vegardvel@yahoo.no.
