The Economics of Energy Innovation and System Transition (EEIST)

EEIST

Policy Support Fund (PSF)

Background

The UK, EU member states, Brazil, China and India are committed to deploying unprecedented capacities of low-carbon technology under the Paris Agreement, and the UK government has recently become the first major country to adopt a binding legislative commitment to net-zero emissions by 2050. Such a rapid transition, in the form of a complete transformation of industrial and energy end-use systems, requires significant policy and regulatory changes. However, where conventional energy economic models and integrated assessment models (IAMs) focus solely on markets, proposed changes are perceived as having few benefits and involving both incurred costs and the devaluation of current assets. The more slowly the transition progresses, the longer those assets are exposed to risks from the impacts of climate change itself.

Programme summary

The Economics of Energy Innovation and System Transition (EEIST), is coordinated by Dr Mercure from the University of Exeter and includes over 40 socio-economic and policy researchers and experts across 15 stakeholder institutions. It is an ambitious three-year programme drawing upon new economic models, to reframe energy innovation, system transition and climate change mitigation as issues of strategic risk management. It represents a transnational community of practice, and a science-policy bridge, bringing together experts and decision-makers in China, India, Brazil, and the EU and the UK in cooperation with the Department for Business, Energy and Industrial Strategy (BEIS). EEIST is working with partner country governments to embed the risks and opportunities of low-carbon innovation and technological change into the policy appraisal process.

A five-stage co-production process will generate tailored insights, policy appraisal approaches, models and solutions, within the context of existing science-policy interfaces characterising each country.

How will the programme contribute to policy making?

EEIST will deliver new economic models, in the form of clear and practical complexity-based modelling tools. These tools will be capable of assessing the likely impact of energy, innovation and technology-related policy choices along a multi-dimensional economic-environmental spectrum.

This will transform both current partner country governments’ decision-making processes, and those of governments and experts internationally, through an extensive application programme to communicate the strategic value of EEIST’s pioneering approach, methods and principles for policymaking. The programme promises to revolutionise policy appraisal well beyond the life and of the project, and at a global scale.

Underpinning research for the project funded by the Newton Fund/Economic and Social Research Council (ESRC).