Conference Agenda

Green industrial policy has become a central tool for accelerating the deployment of clean technologies in hard-to-abate sectors, yet there is little economic guidance on how governments should choose among alternative policy instruments. This paper develops a unified framework to compare green industrial policy designs when clean investment is irreversible, learning-by-doing and market formation generate dynamic spillovers, and private returns are uncertain. We show that instrument choice is irrelevant in deterministic environments: conditional on inducing the same deployment, alternative instruments are equivalent in welfare terms. Under uncertainty, however, irreversible investment creates an option value of waiting that delays socially desirable deployment. Policy instruments differ in how they reshape the distribution of returns, reduce downside risk, and accelerate investment timing. Using the marginal value of public funds as a welfare metric, we show that state-contingent price stabilization instruments dominate deterministic subsidies, and that symmetric contracts weakly dominate one-sided guarantees by achieving similar deployment with lower expected fiscal cost. A quantitative framework illustrates the magnitude of these effects.