233233 K. Wennberg, C. Sandström (eds.), Questioning the Entrepreneurial State, International Studies in Entrepreneurship 53, https://doi.org/10.1007/978-3-030-94273-1_13 C. Amenta and C. Stagnaro

234Introduction

Since the 1990s, the European Union has set the goal of gaining global leadership in clean energies. After joining the Kyoto Protocol and committing to cut emissions in 2008–2012 by 8% below the 1990 benchmark, the Union progressively raised its ambition by setting further goals of cutting emissions by 20% below 1990 levels in 2020, then by 40% (more recently raised to 55%) in 2030, and eventually to net-zero emissions in 2050. In the light of these goals, both the European Union and the member states have adopted several policy tools, including high taxes on the use of fossil fuels, technical standards, renewable portfolio standards, a cap-and-trade scheme called the Emissions Trading System, subsidies to clean energies, and other regulations intended to curb carbon-based energies. Moreover, on top of the emissions reduction goals, Europe adopted binding targets concerning the share of renewable energies in final consumption and investments in energy efficiency. In order to meet the targets, member states introduced generous subsidies to renewable energy sources. Recent estimates indicate that subsidies to the production of green energies in 2018 amounted to about €73 billion, or some 0.5% of E.U. GDP (excluding the U.K.) (EC, 2020a). More financial aid was granted to energy consumers (€52 billion in 2018), energy efficiency (€15 billion), energy infrastructure (€1.45 billion), industry restructuring (€1.85 billion), R&D (€4.55 billion), and the production of non-green energy (€12 billion). Subsidies to renewable energies mainly took the form of direct financial transfers, such as feed-in tariffs or other forms of income or price support.

Subsidies to green energies fit with the idea of “mission-oriented innovation,” which is frequently employed by the supporters of the entrepreneurial state. For example, in a report on behalf of the E.U. Commission, economist Mariana Mazzucato (2018, p. 4) cites carbon-neutral cities as a quintessential example of mission-oriented innovation and argues, “Mission-oriented policies can be defined as systemic public policies that draw on frontier knowledge to attain specific goals.” According to the proponents of the entrepreneurial state, mission-oriented innovation can pursue three goals simultaneously, i.e., an environmental goal (cutting emissions), an industrial policy goal (promoting growth), and a social goal (promoting equality and fairness). In another influential paper, Mazzucato (2015) calls for a more interventionist role of the governments to drive—rather than pushing—the green transformation of the economy: She argues that the “green entrepreneurial state” should push the “green industrial revolution” by engaging in various forms of “entrepreneurial risk-taking” in order to “launch specific green technologies” such as “wind turbines and solar photovoltaic panels.” Given the magnitude of the climate challenge, these proposals deserve scrutiny. All the broader criticisms of the entrepreneurial state hold (McCloskey & Mingardi, 2020). This chapter will try to develop a more specific argument that considers the peculiarities of climate policy, on one hand, and of energy systems and industries, on the other hand.

Mazzucato claims that some governments, including Germany, Denmark, and China, have already played this role. This may be true to an extent, as we shall see in