Rent Management: The Heart of Green Industrial Policy

This research paper argues that green industrial policy should focus on 'rent management' rather than the avoidance of rent creation. The authors contend that creating rents (extra profits) is necessary to attract investment into risky green technologies where markets fail, and that the primary challenge is defining the correct amount of profit to offer and knowing when to withdraw it as markets mature.

• The authors argue that while rent-seeking is a risk, the creation of rents is essential to attract investment into risky green technology sectors that markets otherwise fail to support.
• The paper proposes shifting the policy debate toward 'rent management,' which involves determining the appropriate level of extra profits to provide, the method of delivery, and the timing for their withdrawal once markets function independently.
• Rent management within green industrial policy—defined as government-led restructuring toward a low carbon economy—is particularly difficult due to long investment time horizons and high technological uncertainties.

APA

Stockholm Environment Institute (2015). Rent Management: The Heart of Green Industrial Policy. https://www.sei.org/publications/rent-management-the-heart-of-green-industrial-policy/

Chicago

Stockholm Environment Institute. Rent Management: The Heart of Green Industrial Policy. 2015. https://www.sei.org/publications/rent-management-the-heart-of-green-industrial-policy/.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=Rent Management: The Heart of Green Industrial Policy |date=29 October 2015 |url=https://www.sei.org/publications/rent-management-the-heart-of-green-industrial-policy/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitute2015rent, author = {{Stockholm Environment Institute}}, title = {{Rent Management: The Heart of Green Industrial Policy}}, institution = {Stockholm Environment Institute}, year = {2015}, month = oct, url = {https://www.sei.org/publications/rent-management-the-heart-of-green-industrial-policy/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }