Comparing Regulatory Innovations for Climate Change : Smart Grids Policies in the USA and the EU

Smart grids are one of the technological innovations which should drive the transition towards a low-carbon society in the coming decades. However, how to manage the parallel dynamics of technological and regulatory innovations is still debated. This paper proposes to apply a comparative diagnostic approach to explain which institutional factors affect the regulation of smart grids in the US and the EU. Such an approach does not provide a blueprint for the regulation of smart grids. It suggests that each regulatory innovation can be explained by observing its relationship with higher-level institutional factors. In the case of US and EU smart grids policies, the main finding is that both systems are prompted by internal institutional factors to experiment divergent regulatory innovations. At the same time, their involvement in several transnational initiatives aimed at promoting regulatory convergence in the global market for smart grid technologies should provide new options to cope with persistent regulatory divergences