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Journal cover: Journal of Knowledge-based Innovation in China

Journal of Knowledge-based Innovation in China

ISSN: 1756-1418

Online from: 2009

Subject Area: Enterprise and Innovation

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Low-carbon innovation in China – introduction to the special issue

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Article citation: David Tyfield, Jun Jin, (2010) "Low-carbon innovation in China – introduction to the special issue", Journal of Knowledge-based Innovation in China, Vol. 2 Iss: 3, pp. -



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Article Type: Guest editorial From: Journal of Knowledge-based Innovation in China, Volume 2, Issue 3

1 Climate change, China and low-carbon innovation

Climate change through the global warming effects of human emissions of greenhouse gases (GHGs) is now one of the gravest challenges facing the world, notwithstanding recent over heating of controversy about the science. While the historical atmospheric accumulation of GHGs is overwhelmingly the responsibility of the developed economies of the global north, where per capita rates of emission also remain much higher, the industrialization and rapid economic growth of many populous developing countries is adding another dimension to prospective global efforts to mitigate global warming.

China is a key player in this global issue, overtaking the USA around 2007 as the nation-state with the largest overall GHG emissions. To be sure, a significant amount of China’s emissions are heavy industries and manufacturing that service export markets in the developed economies, thus effectively off-shoring their emissions to China (Wang and Watson, 2009). But with a national grid that is overwhelmingly dependent on coal and widespread inefficiencies in use of energy, there is room for much improvement in China’s emissions (Wang, this volume). Furthermore, while average per capita emissions remain comparatively small in China (at approximately one-fifth of those in the USA, half of those in the UK), they are already reaching the ecologically sustainable threshold (with developed country emissions far beyond this limit) and are likely to continue to rise significantly in future years. Indeed, on one calculation, extrapolation of current trends in China set against meeting of emission reduction targets in the EU would see China’s per capita emissions rising to double those of the EU as early as 2020 (Climate Group, 2008).

In these circumstances, it is clear that decarbonising social and economic activity is as much as a global imperative in China as in the historical polluters. The key question, therefore, is regarding the strengths and weaknesses of China’s capabilities for low-carbon innovation to effect such a change; and in the context of the unprecedented time pressure of doing so within a single generation. Just as importantly, what can be done to expedite this change, capitalize upon existing strengths and transform or minimize weaknesses? This special issue begins to explore these crucial questions across a number of dimensions. Before we proceed to a summary, however, we discuss a framework that seems particularly useful for the aggregation of the diverse questions and lessons relevant to a detailed consideration of these issues, as illustrated in the range of the articles that follow.

2 “Low-Carbon” innovation and systems transition

Perhaps, the most important question we must first address is what is meant by “low carbon innovation”. The conventional view of low-carbon innovation, as exemplified in marginal GHG abatement cost (MAC) curves that are widely employed in forging policy, focuses on radical, hi-tech and usually expensive technologies which may or (more likely) may not pay for themselves through greater efficiency and cost savings. These technological advances are undoubtedly crucial for the shift to a low-carbon society, especially given the industrial concentration of much GHG emissions in which more efficient equipment will have to play a significant role in mitigation. Furthermore, this is no less true for China. For instance, given the current intensity of coal consumption (at roughly 70 per cent of power production) and the current lack of other options for decarbonising coal combustion, carbon capture and storage will almost certainly have to play a significant role, notwithstanding the considerable economic and ecological questions associated with this technology.

Nevertheless, we would argue that it is wrong to treat such hi-tech developments as synonymous with low-carbon innovation, rather than a subset. First, in terms of innovation per se it is mistaken to identify innovation with technological change alone. Rather, as both innovation studies and science and technology studies in particular are evidencing in rich detail, innovation is a social as well as a technological process that involves and entails novel and emergent social forms (e.g. organizations, institutions and regulatory regimes) developing in parallel with any technological novelty and its dispersal through societies (Geels, 2004; Bijker et al., 1987; Nelson, 2008). Innovation thus involves complex and iterative networked interactions of numerous and dispersed agents, including not only entrepreneurs and R&D labs but also users, activists, regulatory agencies and citizens. Furthermore, this perspective refocuses analysis from individual technologies and/or firms towards broader socio-technical regimes and systems. These are the relatively stable assemblages of industrial interdependencies (e.g. cars, oil, rubber for tyres, road construction and maintenance, etc.) and multiple social, political and cultural forces (Dennis and Urry, 2009) that sustain particular technologies and technological trajectories.

This systems perspective assumes even greater importance regarding the particular challenge of low-carbon innovation. For anthropogenic climate change is not merely a market failure – not even the most egregious example of one (Stern, 2007) – but rather a systems failure (Foxon, 2007). Current socio-technical regimes have elicited technologically-assisted forms of social life that are ecologically destructive and that condition innovation that further embeds such problems, effecting carbon lock-in (Unruh, 2000). These in turn result in multiple market failures, especially at “the intersection of environment and innovation” (Foxon, 2007, p. 136; Grubb and Ulph, 2002). Innovation for a low-carbon society must therefore work towards wholesale transitions of socio-technical systems and their associated regulatory regimes. In the context of developing countries such as China, this in turn raises questions of innovation “leapfrogging”, in which it is hoped that countries can entirely bypass familiar stages of socio-economic development (i.e. in this case, high-carbon industrialization) and move directly to a new model of sustainable development (Gallagher, 2006; Freeman, 1992).

There are several literatures from a number of disciplines that have begun to develop analytical frameworks to be able to explore these issues in these terms, though this is not the place for a literature review (Geels, 2004). One theoretical approach that seems particularly promising for synthesizing these literatures, however, is the multi-level perspective (MLP) or transition management theory (Elzen et al., 2004b; Kemp, 1994; Geels, 2005; Smith et al., 2010). Using numerous case studies, this theory has argued for a model in which innovations pass from small beginnings in niches to introduce a discontinuity in the incumbent socio-technical regime and thereby effect a socio-technical transition. At every stage, moreover, the socio-technical trajectory is conditioned not only by the innovation itself (and its technology), but also by interaction with the socio-technical regime and, indeed, with higher-level developments (the “landscape”), for instance regarding broader changes in ecology, politics and culture. In short, the main aim of this perspective is to leave behind simple, singular and/or linear causal accounts and to shift towards attempts to survey (and guide) the complex interactions of this “multi-level, multi-scalar, multi-agent” process (Elzen et al., 2004a, p. 283) that will actually effect a low-carbon transition.

The need for such a perspective may be further illustrated by considering some of the particular challenges facing current attempts at a low-carbon transition. First, it is clear that such a transition is not equivalent to a Manhattan project (Mowery et al., 2009) in the need for widespread social change, rather than a singular, government-sponsored innovation. Second, the interaction of multiple levels is evident in the challenge low-carbon transition poses to the standard state/market debate regarding industrial/innovation policy. As Berkhout et al. (2004, p. 56) put it, for instance, “the important possibility is raised that ‘top-down’ processes may play a crucial role in generating ‘bottom-up’ opportunities for linking”. Third, given the dependence of much low-carbon innovation on regulatory support of various sorts, its multi-scalar nature becomes apparent as it involves interactions not only between individual producers and consumers but also regulation at the local, national and, given the global impact of rising temperatures, global levels. Finally, following this last point, it is also apparent that the current turbulent international context of economic crisis, emergent globalisation and potential geopolitical transition (namely towards China and away from the “west”) also is in intimate interaction with the trajectory of low-carbon innovation (Tyfield et al., 2008). It follows that when considering low-carbon innovation and its prospects, we must not only to look at “promising novelties but also at ongoing processes at the regime and landscape levels” (Geels, 2004, p. 42).

Furthermore, given the complex interactions involved, with agency and active users as key issues, this perspective also forces acknowledgement of the importance of “second-order” learning – i.e. not only technical learning about the individual innovations themselves (first-order), but also social learning about broader processes of facilitating innovation – across all relevant levels (Elzen et al., 2004a). This learning must continue in an iterative process in parallel to ongoing socio-technical change providing ongoing guidance. Our hope is that this special issue will contribute to such second-order learning regarding the current status, trajectory and options for low-carbon innovation in China.

Finally, assuming such a systems and MLP opens up the crucial possibility of considering not only quantitative questions of the scale of innovation, but also irreducible qualitative and normative questions regarding directions of socio-technical change. Such questions are arguably particularly important regarding low-carbon issues, given the need for widespread public participation in both the innovation and management of ecological risks intrinsic to a sustainable systems transition. They must, therefore, be considered even if only on a purely instrumental calculus of attaining the given end of a systems transition (Murphy, 2007). The very inclusion of such considerations, however, immediately effects a significant reframing of the challenge of low-carbon innovation, namely from the conventional one of maximal mitigation of GHG emissions as quickly as possible and as sole priority or criterion (which is arguably a recipe for failure and a counsel of despair) to an urgent but medium to-long-term challenge to construct prosperous, free and low-carbon societies (Tyfield et al., 2008; Stirling, 2009; Murphy, 2007). Furthermore, such redefinition of the relevant time horizons – not “to solve today’s problems by tomorrow but to induce and stimulate the development of longer term but more fundamental and more effective solutions” (Elzen et al., 2004a, p. 290) – both supports the attention to systems (not merely market or technological) failures and creates the policy room that is necessary to take seriously medium-term options.

3 The articles

In the opening article of this special issue, Yi Wang sets out in more detail the challenge of low-carbon innovation for China and the Chinese policy response. Highlighting the multiple dimensions of this issue, including international negotiations, the need to balance a shift to sustainability with continuing socio-economic development of China and the role of public education and training regarding climate change, Wang presents the national policy strategy for encouraging low-carbon development. This focuses on the strategic policy targets announced by President Hu Jintao at the UN in November 2009 regarding improved intensity of energy and carbon dioxide emissions per unit of GDP. Wang thus starts off the discussion with a succinct and official summary of Chinese policy thinking about low-carbon innovation, appearing here for the first time in English.

In the second article, by Nicoletta Marigo, Timothy J. Foxon and Peter J.G. Pearson, we turn from the overall policy framework to analysis of the key question of the development of innovation capabilities within a high-technology sector of crucial importance to a low-carbon transition in China, namely manufacture of solar photovoltaic (PV) panels. Noting how China’s solar PV industry has grown in the last decade to become one of the largest and most dynamic in the world, Marigo et al. use a technological capability (TC) methodology to study the extent to which these capabilities for technological innovation have improved across the industry. They find that as early as 2005, major firms had already progressed well beyond basic operational capabilities and were moving quickly towards developing their own hi-tech components rather than relying on imports. There is thus significant evidence that Chinese solar PV companies are developing the technological capabilities needed to make a major contribution to low-carbon transition of the Chinese economy. However, in ways that relate back to the questions raised by the MLP discussed above, they also caution that capitalizing upon these opportunities will depend upon overcoming a number of broader barriers that domestic policy should also target, including the policy focus on the most mature PV technologies and the overwhelming export focus of the PV firms. As regards second-order learning, they also highlight important theoretical conclusions regarding use of the TC approach in the context of developing countries.

Marigo et al. thus provide an illuminating case study into the development of hi-tech innovation capacities in China. In the third paper, conversely, David Tyfield and Jun Jin explore the opportunities in China for pursuing a different innovation strategy that focuses on low-cost disruptive innovations. Taking the idea of disruptive innovation from the firm-level literature of Clayton Christensen and others, Tyfield and Jin explore the interaction of this literature with that of the MLP of low-carbon systems transition in order to argue that disruptive innovation may well have a significant low-carbon contribution to make. The argument is then pursued in the particular case of China, exploring the multi-level opportunities of a disruptive low-carbon policy and/or strategy given the specific conditions, challenges, strengths and weaknesses of China’s current innovation system. A research agenda that incorporates investigation of these lower profile innovations in China is advocated.

As the MLP makes clear, policy analysis has a crucial role to play in the iterative learning process of facilitating a low-carbon transition and in the final paper, by Liguang Liu, we turn to these issues of innovation governance. Liu uses a policy network methodology to examine the efficacy, emergence and problems for a key Chinese policy to encourage industrial transformation towards lower carbon emissions through increased energy efficiency; a major pillar of national policy as documented in Wang’s article. The Top-1,000 Industrial Energy Conservation Programme, initiated in April 2006, has aimed to reduce GHG emissions from approximately 1,000 of the largest state-owned firms across nine energy-intensive sectors by 100 million tons of coal equivalent (tce) between 2006-2010. This target was met in 2009, ahead of schedule. The scheme may therefore be treated as a success. Liu seeks to problematize this conclusion, however, in two respects. First, in meeting the target early, there has been no incentive to continue energy efficiency improvements in 2010 and, moreover, data supporting the early meeting of targets is not available for public scrutiny. Second, the policy is also often held up as an exemplar of a successful voluntary programme of emission reductions, which is seen as both a more constructive policy approach by business and as illustrative of the kind of shifts in governance of innovation towards more devolved and less top-down models that seem to be required for a low-carbon transition. Liu argues, however, that while a pilot project was indeed largely a voluntary agreement, rolling out the program on a national scale transformed it into a familiar top-down policy. In exploring the reason for this shift and the difficulty of maintaining the voluntary and participative aspect of the policy in its bigger, national incarnation, Liu uses the policy network approach to highlight a number of continuing challenges for low-carbon innovation governance in the Chinese context.

It is not our intention to try to synthesize these findings here into what can only be a prematurely, and so falsely, coherent body of knowledge about low-carbon innovation in China. But as the wide range of these papers, in both subject matters and disciplinary perspectives, illustrates, there is a need for concerted and (internationally) collaborative research and discussion of these issues to expedite and facilitate the kind of low-carbon system transition that is needed in China and, perhaps following its example, across the world. It is hoped this special issue contributes to construction and expansion of this conversation.


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David Tyfield, Jun Jin
Guest Editors