Dr. Oliver Schenker

Today’s global economy is based on the overuse of natural resources. The economist Dr. Oliver Schenker develops models that give developing countries the opportunity to establish sustainable energy systems. With the Robert Bosch Junior Professorship "Sustainable Use of Renewable Natural Resources" the Foundation provides him with one million Euro over five years for his research.
Robert Bosch Stiftung | April 2016
Photo: Viktor - Fotolia

Climate and Environmental Policy Instruments in Emerging and Developing Countries

As a Robert Bosch Junior Professor, Dr. Oliver Schenker will be dealing with the effects of climate and environmental policy instruments in emerging and developing countries. In particular, he will be investigating the reciprocal effects between policy instruments and their resilience to external shocks.

The goal of Dr. Schenker’s research is to identify options for shaping energy and climate policies that can guide and control the necessary development of the energy systems in emerging and developing countries to becoming sustainable and low-carbon societies.

In the interview, he speaks about what science means to him and what is special about his research plans as a 2016 Robert Bosch Junior Professor.
 

What do you like about being a researcher?

As a research scientist, I can follow my curiosity for understanding the links between various factors. What I like about scientific research is the opportunity to delve deep into questions and having the necessary space to understand these questions - and finding a satisfying answer to them. If these answers can contribute to solving societal problems - even better.


Why did you become an economist?

I became an economist because I have always been interested in the function of society and the interaction between its individuals and institutions. As part of my doctoral thesis, I took on the topic of the economic links between questions of the environment and climate for the first time. This complex and diverse field is one of the greatest societal challenges - one that humanity can only overcome by working together, and one that affects the core of our economic activity.


What do you see as the greatest challenges to transitioning to a low-carbon society?

In my opinion, there are primarily two problems to address in terms of policy making.

One enormous challenge is acting and making decisions faced with the uncertainty of a very long period of time. Changes in available technologies, institutions, and preferences are unpredictable. We see this, for example, in the situation of the large energy providers in Europe. Today, they have to deal with framework conditions that could not have been foreseen 30 or 40 years ago, when much of the investment in the sector in use today was made - the introduction of emissions trading and the energy transition, for example. Many things change simultaneously - in emerging and developing countries in particular - and a framework is needed that offers orientation, but that also creates the necessary flexibility and adaptability to enable the adequate reaction to unforeseen future changes.

The second great challenge, as I see it, is the complexity of the systems in which this transformation has to occur - take China, for example. China’s emissions are in large part due to the burning of coal in the energy sector, so a transformation of the energy system is urgently needed. There, we have a complex regulatory framework made up of both market- and command-economical factors. Not only are the policies of the central government important to the execution of climate protection strategies, but regional and provincial policies are as well. Different regulations interact with each other and make it anything but simple to understand the effect of individual policy measures. Coming to grips with this complexity is, however, a key to the successful implementation and execution of measures.


What is new and special about your approach to research as part of your Robert Bosch Junior Professorship?

I research which policy measures will best enable the transformation of developing and emerging countries to a low-carbon economy. A key to my approach is analyzing the effects and reciprocal effects that policy instruments have as they are constituted. Additionally, I incorporate uncertainties - for example regarding economic fluctuations - into the analyses. In this process, economic equilibrium models are used that will also be respectively further developed. The focus area of many environmental-economical analyses conducted to this point has been on industrialized countries. But it is important in developing and emerging countries in particular - where, for instance, numerous coal-burning power plants are currently being built and commissioned - to establish the relationship between developments and to address problems.


Which instruments could possibly be used to stop the construction of power plants, and which problems could be associated with this?

The currently very low coal prices on the world markets make building and operating coal-burning power plants a very attractive option. Falling transport costs and improved infrastructure in many emerging and developing countries make the profitable operation of these plants possible - even at great distances from coal-mining regions. The credible and stringent pricing of existing CO2 emissions is the most promising means to this end. However, access to affordable electricity is still a pressing issue in many developing and emerging countries. That is why, for example - in spite of the United Nations’ Paris Agreement regarding climate change - India intends to double its coal mining by 2020 in order to make affordable power available to its rapidly growing population and economy. To address this dilemma, the course has to be set today to allow India to steer towards a sustainable growth track that will still allow affordable access to energy for all.


Why did you apply for the Robert Bosch Junior Professorship?

The imperative of sustainable use of renewable natural resources is a key topic for our society. It is important to approach this topic from several different perspectives. The Robert Bosch Junior Professorship makes it possible for me to conduct research with great resources in a challenging application-oriented field and to find new answers to these questions.

Photo: ZEW