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  5. Local Energy Governance and the Vision for Economic and Industrial Structures

2012 Vol.3
Local Energy Governance and the Vision for Economic and Industrial Structures


This paper discusses what is needed for shifts to occur in economic and industrial structure at local level to enable local energy governance, taking Germany as an example of an industrial economy that is shifting to such structures. First, in the case of Germany, it is verified that a shift in industrial structure is occurring in connection with the development of sustainable energy and increased employment in related industries. There was originally vigorous debate on the effects that environmental policies might have on employment and some were critical that such policies would deprive people of employment opportunities. In actuality, however, quantitative analyses have revealed that such policies created new industries and more jobs. From these studies has emerged the view that environmental policies are a means not only to protect the environment but also to create environmental-related industries and employment. They set a precedence for the ideas of green economy and green innovation.
On the basis of these arguments, some cities in Germany such as Freiburg began to strategically develop environmental industry at local level. Iida city in Japan is also moving in the same direction. Experiences from Iida so far reveal that software rather than hardware is important; that is, human resources, organizations, and finances are critically more important than infrastructure such as electric power generating facilities. In other words, the accumulation of human capital and social relation capital at local level is the key to development of the sustainable energy industry. Moreover, from a funding perspective, it is necessary to develop structures which accumulate human and social relation capital that can add value to natural resources. The foundations for local energy governance require such structures.