Exploring the role of phase-out policies for low-carbon energy transitions

The energy sector plays a significant role in reaching the ambitious climate policy target of limiting the global temperature increase to well below 2 °C. To this end, technological change has to be redirected and accelerated in the direction of zero-carbon solutions. Given the urgency and magnitude of the climate change challenge it has been argued that this calls for a policy mix which simultaneously supports low-carbon solutions and also deliberately drives the discontinuation of the established technological regime. Yet, the effect of such phase-out policies on the development and diffusion of low-carbon technologies has received little attention in empirical research so far. This paper addresses this gap by taking the case of the transition of the German electricity system towards renewable energies - the so-called Energiewende. Based on a survey of innovation activities of German manufacturers of renewable power generation technologies conducted in 2014 it explores the impact such destabilization policies - most prominently Germany's nuclear phase-out policy - may have on technological change in renewable energies. By drawing on descriptive statistics and combining insights from earlier regression analyses we find evidence that Germany's nuclear phase-out policy had a positive influence on manufacturers' innovation expenditures for renewable energies and was seen as the by far most influential policy instrument for the further expansion of renewable energies in Germany. The insights resulting from our explorative analysis have important implications for the literature on policy mixes and sustainability transitions regarding the 'flip sides' to innovation and the crucial importance of destabilization policies for unleashing 'destructive creation'. We close by discussing policy repercussions for ongoing debates on policies for accelerating the phase-out of coal to meet climate change targets.