Switch Point and First-Mover Advantage: The Case of the Wind Turbine Industry

Why has the EU been so eager to continue the climate negotiations? Can it be solely attributed to the <p> EU feeling morally obliged to be the main initiator of continued progress on the climate change <p> negotiations, or can industrial interests in the EU, at least partly, explain the behaviour of the EU? We <p> suggest that the individual member countries in the EU, such as Germany and Denmark, have a <p> rational economic interest in forcing the technological development of renewable energy sources to <p> get a first-mover advantage. Here, the Kyoto Protocol, which imposes binding greenhouse gas <p> reductions on 38 OECD countries, implies that, as a first-mover, the EU will potentially sell the <p> necessary new renewable technologies, most prominently wind mills, to other countries. In the latest <p> EU proposal made in Johannesburg, the EU pushed for setting a target of 15% of all energy to come <p> from sources such as windmills, solar panels and waves by 2015. Such a political target level would <p> further the EU’s interests globally, and could suggest, in economic terms, why the EU eagerly <p> promotes greenhouse gas trade at a global level. In contrast, the US has left the Kyoto agreement to <p> save the import costs of buying the EU’s renewable energy systems.