An Industrial Policy Renaissance
The challenges and opportunities of going green
A new wave of green industrial policies comes with a set of important economic and social trade-offs for the implementing countries as well as the cross-border impacts for their trading partners.
Key Messages
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Countries worldwide are adopting industrial policies to achieve environmental, competitiveness, and security objectives, but those policies inevitably impact their trading partners.
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The main challenge for international cooperation on new green industrial policies is making them work for developing countries.
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International dialogue and cooperation are imperative to guide the design of industrial policies that can best achieve climate objectives while causing no harm to the growth and development of others.
This publication explores the global resurgence of industrial policy with a focus on green industrial policy that aims to combine economic competitiveness with environmental sustainability. It defines green industrial policy as government intervention to restructure economies toward low-carbon and resource-efficient systems while maintaining prosperity and jobs. The publication reviews the historical evolution of industrial policy, from early import-substitution/export-promotion strategies to the Washington Consensus and its rejection of state intervention, before charting the return of industrial policies driven by climate imperatives, geopolitical rivalry, and supply chain disruptions.
Through case studies of China, the United States, the European Union, Canada, Brazil, and South Korea, the report highlights diverse national approaches, their successes and setbacks, and the tensions they create in global trade. The analysis emphasizes both the economic opportunities and risks of unequal benefits and adverse impacts on trading partners, as well as the environmental and competitiveness gains. The report concludes with key questions for national and international policy-makers, stressing the need for transparent, equitable, and cooperative frameworks to maximize global welfare while ensuring fair opportunities for developing countries.
Participating experts
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