Presentation on theme: "Renewable transport fuels and innovation policy Presentation for IPPR workshop: driving innovation and long term investment in low carbon vehicles Robert."— Presentation transcript:
Renewable transport fuels and innovation policy Presentation for IPPR workshop: driving innovation and long term investment in low carbon vehicles Robert Gross and Ausilio Bauen, Imperial College London 14 April 2003
Overview RTF report – brief overview and some conclusions Work on innovation systems – ditto Implications for fiscal and other policy measures to support low carbon vehicles
ICCEPT work on innovation Report on innovation and environment (2001) Work for PIU Resource Productivity report New ESRC project on policy instruments Current DTI study on innovation system for renewables Context is long history of work in the area, and greater attention to it on the continent…. Early work: –Freeman - UK/Japan (1987), Lundvall - Denmark (1992), Nelson - US (1993) OECD ( ): –empirical, analytic and policy work across 24 countries
Interactive model of innovation process market transactions and knowledge flows among firms, institutions and human resources in innovation system
Key theoretical ideas Systemic interactions between many players Uncertainty and bounded rationality –Learning-by-doing, learning-by-using Importance of knowledge and skills –Role of expectations Institutional set up matters –market rules, policy and regulatory incentives and barriers
General thoughts on innovation policy UK environmental policy ignores innovation, whilst innovation policy ignores the environment. –This is being remedied but… Innovation support means more than just R&D plus market pull that only acts on near commercial options A whole chain approach is needed… –R&D, early demonstrations, niche markets for learning by doing, pre-commercial incentives, regulatory framework that gives new commercial options a fair go –Includes expectations and long term strategy (the picking winners problem…)
Pulling it all together: innovation policy for RTF and vehicles 3 aspects: vehicles, fuel sources, infrastructure Fiscal measures can only act directly on state-of-the-art commercial biodiesel and bioethanol chains (not great) Medium term fuels are better; FT diesel and lignocellusic ethanol –Costs are above the places where simple fuel tax breaks can reach, & further technology development needed –Do not need infrastructural change, but do need learning by doing – role for niche markets, and hence regulation?
Policy for vehicle improvement at the same time, these biofuels do not need step change to new infrastructure –Fiscal measures yes (but vehicle excise, not just fuels) –Role of regulation, VAs and targets – to level up (ACEA) and raise the game (ZEV) Longer term, hydrogen still the best bet –Infrastructural change suggests role for experiments based on depot fuelled fleets –These should be increasingly large in scale and scope –Also, regulatory standards, work on perceptions and continued R&D –Can we set expectations and avoid picking winners?