Tobias Schmidt

ETH Zurich | ETH Zürich · Department of Humanities, Social and Political Sciences

Effective mitigation of climate change requires investment flows to be redirected from high- to low-carbon technologies. However, especially in developing countries, low-carbon investments often suffer from high risks. More research is needed to address these risks and allow sound policy decisions to be made.

Technological innovation, often induced by national and subnational policies, can be a key driver of global climate and energy policy ambition and action. A better understanding of the technology–politics feedback link can help to further increase ambitions. Free access under: http://rdcu.be/s2LQ

The world market for battery and hybrid electric vehicles (EVs), including passenger cars, buses, and freight trucks, is growing rapidly. Currently, almost all lithium-ion (Li-ion) battery cells for EVs are produced by East Asian (Chinese, Japanese, and Korean) manufacturers. Meanwhile, the European automotive industry, among the largest in the wor...

Accelerating innovation in low-carbon technologies is fundamental in order to achieve global climate targets. However, only few technologies are currently on track to meet these targets. Here, we review and synthesize the innovation literature to develop a technology typology that helps explain systematic differences in technologies’ experience rat...

Low-cost electricity-storage technologies (ESTs) enable rapid decarbonization of energy systems. However, current EST cost estimates lack meaningful models to assess alternative market and technology scenarios. Here, we project the competition between six ESTs until 2030 and derive cost benchmarks. To this end, a system-dynamic simulation model ope...

Achieving most sustainable development goals (SDGs) and the Paris climate targets depends on the fast transformation of complex socio-technical systems. Recent research has highlighted the importance of crossing positive tipping points to accelerate the transformation of complex energy, food, and transport systems. Yet, there is a lack of research...

Aligning development and climate goals means Africa’s energy systems will be based on clean energy technologies in the long term, but pathways to get there are uncertain and variable across countries. Although current debates about natural gas and renewables in Africa are heated, they largely ignore the substantial context specificity of the starti...

Focus on upstream production, not downstream use

With rapidly decreasing purchase prices of electric vehicles, charging costs are becoming ever more important for the diffusion of electric vehicles as required to decarbonize transport. However, the costs of charging electric vehicles in Europe are largely unknown. Here we develop a systematic classification of charging options, gather extensive m...

Phasing out coal is a crucial lever in reaching international climate targets. However, the resulting jobs losses might trigger voter backlash, making phase-outs politically costly. Here, we present an analysis of the electoral response to coal mining job losses in US presidential elections using matched and bordering difference-in-difference (DiD)...

As latecomers to the industrialization process, developing countries may face barriers to upgrading from the production of mass-produced goods to higher-value technologies. Scholars have suggested that ‘windows of opportunity’ can temporarily lower entry barriers and provide an opportunity for latecomers to catch up to or even leapfrog incumbents....

Technology adoption is crucial to address pressing public policy issues such as climate change, but the role of ownership structure in adoption decisions is not well understood. The low-carbon energy transition in the electricity industry is a case in point. Following market liberalization, the electricity industry in many countries is now characte...

Electrifying 600 million people in sub-Saharan Africa will require substantial investments. Integrated electrification models inform key policy decisions and electricity access investments in many countries. While current electrification models apply sophisticated geospatial methods, they often make simplistic assumptions about financing conditions...

Substantial renewable energy (RE) cost reductions have raised the prospect of a subsidy-free RE era of the energy transition. The envisaged policy cornerstones of this era are carbon markets, which create economic incentives for sustaining further RE deployment. However, this overlooks that exposing RE to market risks and increasing interest rates...

In light of the Paris Agreement, road-freight represents a critically difficult-to-abate sector. In order to meet the ambitious European transport sector emissions reduction targets, a rapid transition to zero-carbon road-freight is necessary. However, limited policy assessments indicate where and how to appropriately intervene in this sector. To s...

In light of climate change mitigation and the transformation of the energy sector, many jurisdictions have adopted deployment policies for renewable energy (RE) technologies. Several RE deployment policy instruments have diffused from frontrunner countries to other jurisdictions. Switzerland implemented its first comprehensive RE support policy wit...

Policy Brief summarizing the key insights of the finance stream within the EU Horizon 2020 INNOPATHS project.

Given the importance of financial capital for major socio-technical transitions, a better understanding of the financial system's role in transitions is overdue. Established transition frameworks appear well-suited to that end, but more research is needed to exploit their potential, particularly in the middle-range between specific case studies of...

It is important for policymakers and industry practitioners to understand the factors that influence the evolution of a technology's knowledge base, i.e., its knowledge trajectory. The literature on the evolution of technologies and their underlying knowledge bases suggests that technological innovation takes place in an incremental and cumulative...

Cost of capital is an important driver of investment decisions, including the large investments needed to execute the low-carbon energy transition. Most models, however, abstract from country or technology differences in cost of capital and use uniform assumptions. These might lead to biased results regarding the transition of certain countries tow...

Electricity storage systems can support the decarbonization of energy systems. However, the effect of electricity storage use on greenhouse gas emissions is complex because of roundtrip efficiency losses of the storage and its effects on the dispatch of different electricity-generation technologies. The limited literature examining this issue focus...

Reaching the climate targets set in the Paris Agreement on climate change requires decarbonizing all parts of the global economy. The electrification of industry processes—and more specifically, electrosynthesis (ES)—is an important decarbonization mechanism. In order to tap into this mechanism’s potential and accelerate the decarbonization of thes...

Sustainable development goal 7.1 aims to ensure access to electricity for approximately 800 million people who currently live without electricity. Despite its advantages over other electrification approaches, global diffusion of renewable energy-based micro-grids (RE-MG) is rather low. Typically, diffusion bottlenecks are thought to be related to i...

Solar photovoltaics and batteries are key technologies to enable a rapid decarbonization of electricity systems. Commercial & industrial consumers are an important market for these technologies due to their fast growing electricity demand, particularly in emerging economies. However, it remains unclear if photovoltaics and battery installations are...

Any major socio-technical transition requires a fundamental re-direction of financial capital from incumbent to new technologies and practices. While the transitions literature conceptually covers financial markets, the role of finance is marginalized and has scarcely been analysed empirically. To address this gap, here we build on the multi-level...

Despite a renaissance of policy design thinking in public policy literature and a renewed interest in agency in the policy process literature, agency in the policy design process has, so far, not received systematic attention. Understanding the agency at play when designing policy, however, is crucial for better comprehension of policy design choic...

The Paris Agreement will require national level mitigation action that takes advantage of economic and technological opportunities while redirecting finance towards low-carbon alternatives. However, climate change has been politicized in many countries, potentially blocking the introduction of climate policies and broader green industrial policies....

When addressing complex societal problems, public regulation is increasingly complemented by private regulation. Extant literature has provided valuable insights into the effectiveness of such complex governance structures, with most empirical studies focusing on how public regulation influences private regulation. Conversely, the impact of private...

Bjarne Steffen is a senior researcher at ETH Zurich’s Energy Politics Group. His research addresses policies related to energy innovation and the role of finance in the energy transition. He previously worked at MIT’s Center for Energy and Environmental Policy Research, the World Economic Forum, and a strategy consultancy. Bjarne holds a Master’s i...

Learning rates are a central concept in energy system models and integrated assessment models, as they allow researchers to project the future costs of new technologies and to optimize energy system costs. Here we argue that exchange rate fluctuations are an important, but thus far overlooked, determinant of the learning-rate variance observed in t...

Given the decline in investment costs for renewable energy technologies, other cost components have become increasingly important. In 2017, operations and maintenance (O&M) accounted for 20%–25% of lifecycle costs for wind and solar plants in Europe, but the understanding of O&M dynamics is limited. Presenting new data from Germany, here, we consid...

Innovation is critical for economic growth and addressing societal and environmental problems. Therefore, many policy interventions aim to accelerate and redirect technological change. Most modern technologies have value chains spanning multiple sectors, and thus are likely to require cross-sectoral knowledge spillovers. However, knowledge spillove...

Green industrial policies around renewable energy (RE) are growing increasingly prevalent in emerging economy contexts as a means to foster low-carbon industrialization pathways. However, policymakers often face a tradeoff in their policy designs. In this paper, we focus on the tradeoff between minimizing the cost of low-carbon energy generation to...

Financing costs for renewable energy technologies have decreased substantially over the past 18 years, helping make renewables more cost competitive. Leveraging the effect of financial learning and continuing the policies that facilitated favourable financing conditions are key for greater renewable energy adoption in the future.

Increasing the use of renewable energy (RE) is a key enabler of sustainable energy transitions. While the costs of RE have substantially declined in the past, here we show that rising interest rates (IRs) can reverse the trend of decreasing RE costs, particularly in Europe with its historically low IRs. In Germany, IRs recovering to pre-financial c...

With cities being responsible for up to 70% of energy-related carbon emissions, municipal governments worldwide are becoming increasingly aware of their responsibility to act. Many large cities have committed to mitigation by becoming member of a municipal climate network, such as the C40 or the Compact of Mayors. However, there is no consistent as...

Despite the prominence of exogenous factors in theories of policy change, the precise mechanisms that link such factors to policy change remain elusive: The effects of exogenous factors on the politics underlying policy change are not sufficiently conceptualized and empirically analyzed. To address this gap, we propose to distinguish between truly...

Studies in technological innovation systems (TIS) have made significant progress in explaining the dynamics of industry formation for emerging technologies, recognizing that learning is an interactive process. Recent literature suggests that knowledge development and diffusion among different sectors can play a role in the establishment of a TIS. H...

The successful implementation of the Paris Agreement requires substantial energy policy change on the national level. In national energy policy-making, climate change mitigation goals have to be balanced with arguments on other national energy policy goals, namely limiting cost and increasing energy security. Thus far, very little is known about th...

Stationary batteries are an important technological option for renewable energy-based decarbonization of the electricity sector, as they can counterbalance renewable energy sources’ intermittency and provide grid-stabilizing services. However, it has been argued that the additional economic cost of batteries, emissions occurring during the manufact...

This study reviews the effectiveness of policies for renewable energy investments. • We analyse the impact of policies on investment risk and investment return. • We separate the effect of policy design elements on investment risk and return. • The study has important policy implications for a privately financed energy transition. A R T I C L E I N...

Renewable energy technologies are a key lever to mitigate climate change. However, net energy analyses showing low energy returns on energy invested (EROIs) for these technologies raise the question of whether current prosperity can be maintained with an increasingly renewables-dependent energy sector. Here we argue that static net energy analyses...

Multilateral development banks (MDBs) play a pivotal role in the financing of electricity-generation projects in developing countries, thus having a major impact on the emission pathways of these countries. While information about the MDBs’ investments is publicly available, it is dispersed and hard to compare. A comprehensive compilation of all MD...

Renewable energy is a distinct policy field encompassing both economic and environmental considerations. How these are balanced in the face of the 2007–8 economic crisis is an important question relating to the general stickiness of environmental policies. In this chapter, we investigate long-term policy dynamics across both EU and non-EU countries...

Worldwide, around 1 billion people currently lack access to electricity, the vast majority in rural areas. A real opportunity exists to now meet this challenge with private sector solutions for off-grid renewable energy, either via solar-battery mini-grids or solar home systems. This report, Derisking Renewable Energy Investment: Off Grid Electrif...

Renewable energy technologies often face high upfront costs, making financing conditions highly relevant. Thus far, the dynamics of financing conditions are poorly understood. Here, we provide empirical data covering 133 representative utility-scale photovoltaic and onshore wind projects in Germany over the last 18 years. These data reveal that fin...

The current focus on the long-term global warming potential in climate policy-making runs the risk of mitigation options for short-lived climate pollutants being ignored, and tipping points being crossed. We outline how a more balanced perspective on long- and short-lived climate pollutants could become politically feasible.

Technology deployment policies can play a key role in bringing early-stage energy technologies to the market and reducing their cost along their learning curves. Yet, deployment policies may drive unintended and premature lock-in of currently leading technologies. Here we develop an empirically calibrated agent-based model to analyse how deployment...

As renewable energy supply chains have grown increasingly globalized, national clean energy transitions have become highly influenced by international dynamics. However, these dynamics are themselves collectively shaped by domestic policy that drives the deployment of renewables. While spatial spillovers of domestic renewable energy policies have b...

68th LCA forum, Swiss Federal Institute of Technology, Zurich, 16 April, 2018

Article can be downloaded for free here: https://www.sciencedirect.com/science/article/pii/S0048733318300702

Low-carbon energy technologies (renewable energy and energy efficiency) are considered essential to achieve climate change mitigation goals, so a rapid deployment is needed. However there is a significant financing gap and many policymakers are concerned that investment for the large-scale deployment of low-carbon technologies will not materialise...

Today, about 1.1 billion people lack access to electricity worldwide. It is estimated that annual investments of 48 billion USD are required to meet the target of the Sustainable Development Goals of providing universal electricity access by 2030. The need for private investments to meet this target is evident, but small-scale electrification proje...

Fossil fuel subsidies are a key barrier for economic development and climate change mitigation. While the plunge in international fuel prices has increased the political will to introduce fossil fuel subsidy reforms, recently introduced reforms may risk backsliding when fuel prices rebound − particularly if they fail to address the underlying mecha...

Technological innovation systems (TISs) have found favor for analyzing a technology’s innovation dynamics. Complementary to TISs, the sectoral innovation systems approach focuses on sectoral peculiarities regarding innovation. This paper represents a first step towards integrating the sectoral dimension into TIS analysis. This seems particularly re...

Rural electrification rates in India lag behind government goals, in part due to the inability of distribution companies (discoms) to fund central grid expansion. In the absence of central grid electrification, mini-grids offer significant potential for an immediate pathway toward rural electrification and the attendant gains in economic growth and...

The environmental argument behind fossil fuel subsidy reform is strong, particularly among international finance institutions wishing to support transformational low-carbon development. However, supporting reform in practice has often met methodological and political barriers. Instead, a large share of international climate finance has flowed to na...

The role of deployment policies that aim to foster technological change has grown considerably, especially in the fields of energy and climate. However, recent research has shown that the adoption of deployment policies carries the potential of locking in the technology that is most cost-effective at the point of policy introduction, but may be ine...

Batteries could be central to low-carbon energy systems with high shares of intermittent renewable energy sources. However, the investment attractiveness of batteries is still perceived as low, eliciting calls for policy to support deployment. Here we show how the cost of battery deployment can potentially be minimized by introducing an aspect that...

National ‘green growth’ strategies, which aim at decoupling economic development from adverse environmental impacts, have become a new paradigm for policymakers in developing countries. Many green growth strategies are based on policy instruments designed to incentivize the domestic deployment of relatively mature clean technologies and aim at fost...

In electricity systems with a high penetration of wind and solar power generation, electricity storage can be employed to balance power supply and demand. In recent years, stationary batteries are receiving a particularly high degree of attention as they can be used to provide several services in modern electricity systems. However, while a rising...