Economics of Energy Innovation Systems Transition (EEIST)
The project aims to help implement clear and practical complexity-based modelling appraisals solutions for informing decision-making and planning for low-carbon innovation, and technological change.
TERI in consortium with University College London (UCL), University of Cambridge (UCAM), University of Oxford (UOX) and many other partners in India, China, Brazil and United Kingdom is working on a collaborative project for implementing clear and practical complexity-based modelling appraisals solutions for informing decision-making and planning for low-carbon innovation and technological change.
Governments all over the world are considering where to best target government spending and intervention to mitigate the catastrophic impacts of climate change. Many governments use analysis methods such as Cost Benefit Analysis, cost-effectiveness and general equilibrium modelling to generate evidence to guide the decision making process. However, the academic community has identified in various ways the limitations of these approaches. Since current analytical methods depict the evolution of the economy as statistically predictable and assume static economic equilibrium to necessarily exist, they downplay crucial system transformation dynamics at play during transformative change. To the extent that certain areas of policy-making aiming at generating transformative change such as climate change and regional development will need suitable policy appraisal method for better informing structurally transformative policy making.
In EEIST, new approaches are being developed that consider the economy as a complex system in constant change with feedback loops. This enables to better inform how to steer the direction of economic transformation, as opposed to attempting to identify with false certainty distant policy outcomes. Complexity economics methods can help provide governments with different insights into the most effective policy levers, by identifying the likely direction, scale and pace of transformations of economic systems that policies can put in motion. EEIST aims to apply the findings of this work to climate change policy decisions in Brazil, China, India, the EU and the UK.
Supported by BEIS (through its International Climate Finance programme), the Children’s Investment Fund (CIFF) and world leading academics and institutions from Brazil, China, Europe and India, the project has the potential to transform how governments make policy decisions on climate change for years to come.
- New decision-making framework to analyse risk and opportunity during a dynamic low-carbon transition.
- New economic models co-created with emerging economy partners and governments to inform decisions on energy innovation and decarbonisation policies through a broader understanding and control of the transition than would otherwise be possible.
- New national and international Communities of Practice networks of experts exchanging information on respective science-policy interfaces and on policy windows of opportunity for more effective use of evidence in decision-making.
- Enhanced capacity of experts in the largest emerging economies to use and further develop new economic approaches to informing energy innovation and transition policy.