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A new study in the journal Science identifies the political factors that allow some countries to take the lead in adopting cleaner sources of energy, while others lag behind. The team broadly identified three main pathways by which industrialized nations have generally pursued energy transition. These findings offer important lessons as many governments around the world race to stabilize their energy supplies, reduce greenhouse gas emissions and limit the devastating impacts of climate change.
Disruption to global energy markets brought on by Russia’s invasion of Ukraine has caused price spikes similar to the oil crisis of the 1970s. Amid fears of an especially cold winter ahead for many, some countries are increasing their use of fossil fuels while others are turning to alternative power sources or putting temporary caps on price increases. But this may feel like a brief reprieve from much bigger and longer-term issues of national energy stability and how to manage the transition away from fossil fuels to cleaner sources of energy.
“Variation in political institutions plays an important role in how countries respond to climate change and energy shocks like the one we’re seeing now,” said study author Professor Phillip Lipscy from the Graduate Schools of Law and Politics. “Policies that are successful in one country will not necessarily work in other contexts.”
A multinational team analyzed how advanced industrialized countries responded to the current energy crisis and the oil crisis of the 1970s, revealing how the structure of political institutions can help or hinder the shift to clean energy. Lipscy carried out the analysis in collaboration with study co-authors Jonas Meckling of the University of California at Berkeley, Jared Finnegan of University College London and Florence Metz of the University of Twente, in the Netherlands.
They found that the countries that were most successful at pioneering cleaner, but more expensive, energy technologies had political institutions that helped absorb some of the public and corporate pushback. This was done either by insulating policymakers from political opposition or by compensating consumers and corporations for the extra costs. Countries with strong welfare states — such as Germany, Denmark and Finland — could work out long-term, compensatory deals with individuals who may be negatively affected economically. On the other hand, countries with weak welfare states and pluralist state-business relationships — such as the U.K., the U.S. and Australia — tended to experience frequent policy reversals and rely on ad hoc, short-term measures. Compared to the “insulating” and “compensating” Northern European countries, “market-driven” countries wait for the price of new technologies to drop before adopting them. However, this type of transition was often subject to volatility, reversal and price fluctuations.
“Japan provides a good illustration of these different mechanisms at play,” Lipscy said. “Japan responded successfully to the 1970s oil shock, but electoral and administrative reforms since then made Japanese politicians more sensitive to voter backlash about energy prices. This makes it more challenging for the government to respond to both climate change and the recent energy shock.”
The study concluded with three main observations for policymakers. First, the nations that can insulate or compensate should purposefully and sensitively leverage both. If they can absorb costly new policy investments, they are better able to invest in frontier technologies and be transition leaders. Second, nations that pursue market-driven transitions will largely be followers, relying on transition leaders to bring down the cost of clean technology so that it becomes more competitive with fossil fuel and easier to adopt. Finally, although some countries lack strong institutions to absorb political opposition, policymakers can still drive the energy transition forward by supporting energy research and development and removing barriers to clean technologies.
Energy transitions have winners and losers and take place at varying rates. Understanding this and the different paths nations may follow can help policymakers tailor interventions to carefully target each nation’s opportunities and constraints. “You can’t propose effective solutions to energy crises and climate change without understanding politics,” Lipscy said. “I hope this study contributes to greater interdisciplinary collaboration that incorporates the many great insights coming out of political science on this topic.”
IMAGE CREDIT: NASA.