Research ArticleECONOMIC SOCIOLOGY

Financialization impedes climate change mitigation: Evidence from the early American solar industry

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Science Advances  29 Mar 2017:
Vol. 3, no. 3, e1601861
DOI: 10.1126/sciadv.1601861

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  • RE: Max Jerneck's Reply to Gustav Martinsson
    • Max Jerneck, Dr, sociology, Mistra Center for Sustainable Markets (Misum)

    Max Jerneck's Reply to Gustav Martinsson

    I would like to thank Gustav Martinsson for his reply (1) and the opportunity to clarify some points that were not spelled out in my article (2). I fully agree that government support is crucial for the development of solar photovoltaics (PV). Without it, there would be no PV industry to speak of in either the United States or Japan, or anywhere else. Martinsson highlights government R&D spending specifically. The reason I did not focus on this form of state support is that it was at similar levels in both of the countries under study, and therefore could not have accounted for the difference I was aiming to explain. In fact, when Japan overtook the United States as a photovoltaics producer in 1999 (3), the American government was outspending Japan on photovoltaics R&D, and had been doing so throughout most of the preceding period (4). With the exception of the year 1990, the American government spent more on photovoltaics R&D than the Japanese every year of the 1980s and 1990s. If government R&D support was a “first order” explanation for the different trajectories in the two countries, as Martinsson asserts, why did Japan overtake the US while having less of it?

    Martinsson is correct that in the subsequent period, Japanese government R&D spending came to exceed that of the United States. “In 2000, Japan accounted for 36% of government R&D in solar PV technologies compared to the US share...

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    Competing Interests: None declared.
  • RE: Financialization impedes climate change mitigation: Evidence from the early American solar industry

    M. Jerneck recently argued that differences in corporate governance systems (brought about by “financialization”) in the US and Japan go a long way to explain why Japan eclipsed the US as market leaders in the Solar photovoltaics (PV) industry (“Financialization impedes climate change mitigation:
    Evidence from the early American solar industry”). The article deals with an important topic but the analysis and evidence laid out to support the claim that “Financialization” hinders private sector innovation and the development of climate change mitigating clean technologies suffer from, at least, two serious omissions.

    First, the article compares the development of the Solar PV industry in the US with Japan and cites the “PV status report 2006” (1) that the global market share of US firms fell from 90% of the solar PV market in the late 1970s to under 10% in 2005. Japanese firms on the other hand, controlled almost 50% of the solar PV market in 2005. Jerneck claims on page 1 that “Changes to corporate governance and organization brought by financialization are identified as major causes of the difference in outcome.”. This would imply that the US would still dominate the Solar PV market in the absence of changing corporate governance and organization (relative to Japan). However, the article does not even mention the role of government efforts to stimulate solar PV technology or other climate change mitigating technologies.

    The “PV status report 2006” that...

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    Competing Interests: None declared.

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