LOW CARBON INNOVATION AND DEVELOPMENT 41 The implementation of this kind of

Low carbon innovation and development 41 the

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The implementation of this kind of guided capi- talist development will doubtlessly meet with fun- damental institutional obstacles. One of the most severe problems is that nation-states dominate political governance while climate change is pre- eminently a global phenomenon. However, pos- itive responses to this problem are possible, one of which is to point to a green competitiveness strate-gy. Another is to point to the need for international or even global agreements. Were it possible to convince policy makers that taking the lead in low-carbon development would give them an advantage in international competi- tion, we might expect governments to do so. This has taken place at a modest scale, for example, with windmills in Denmark, electric cars in California, and wind and solar power in China. However, for various reasons, this argument has met with resistance. One is that a low-carbon strat- egy will be unfavourable to some industries with a long historical legacy and with strong political power. Organisations that represent the enterprise sector as well as the financial-industrial complex tend to oppose government intervention if some of their members will be affected negatively. Gov- ernments therefore need to establish alliances with those parts of the enterprise sector that have a di- rect interest in a low-carbon strategy. Another factor reducing national efforts in the North is the general resistance in the establish- ment, often fed by mainstream macroeconomists, to selective policies that give the state a steering role. It is a widespread assumption that the market can and should do the job of allocating resources, and that governments should become involved only when there are obvious cases of market fail-ure. This market dogmatism in the North may be contrasted with the extreme degree of pragmatism that characterises the Chinese leadership; it seems that as long as a policy works, their leaders have no problem with any kind of mixing of markets, management, and planning. A change toward a low- carbon innovation strategy will require a battle with market dogmatism. Without international coordination, some of the necessary initiatives may be difficult to implement at the national level. If industries are footloose, new burdens may result in outsourcing to other countries, which may have a net negative impact on global warming (Wang & Watson, 2007). This could be the case if activities are moved to a country without green ambitions. The need to design global cooperation in parallel with national efforts is thus evident, and we can safely say that radical changes in economic systems should be anticipated. With these general reflections in mind, we now return briefly to the different areas in which inno-vation is important.
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