The Political Economy of Clean Energy Transitions

631 Pages·2017·3.74 MB·English

THE POLITICAL ECONOMY OF CLEAN
ENERGY TRANSITIONS
UNU World Institute for Development Economics Research (UNU-WIDER) was
established bytheUnitedNationsUniversityasitsfirstresearchandtraining centre
and started work in Helsinki, Finland, in 1985. The mandate of the institute is to
undertakeappliedresearchandpolicyanalysisonstructuralchangesaffectingdevel-
oping and transitional economies, to provide a forum for the advocacy of policies
leadingtorobust,equitable,andenvironmentallysustainablegrowth,andtopromote
capacitystrengtheningandtraininginthefieldofeconomicandsocialpolicy-making.
Its work is carried out by staff researchers and visiting scholars in Helsinki and via
networksofcollaboratingscholarsandinstitutionsaroundtheworld.
UnitedNationsUniversityWorldInstituteforDevelopment
EconomicsResearch(UNU-WIDER)
Katajanokanlaituri6B,00160Helsinki,Finland
www.wider.unu.edu
The Political Economy of
Clean Energy Transitions
Edited by
DOUGLAS ARENT, CHANNING ARNDT,
MACKAY MILLER, FINN TARP,
AND OWEN ZINAMAN
AstudypreparedbytheUnitedNationsUniversityWorldInstitute
forDevelopmentEconomicsResearch(UNU-WIDER)
1
3
GreatClarendonStreet,Oxford,OX26DP,
UnitedKingdom
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(UNU-WIDER)2017
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Foreword
Sustainableenergytransitionsinvolvetheshiftofresourcesbetweencompet-
ingindustrialsectorsandpoliticalconstituencies.Stakeholdersinthisprocess
havevaryingdegreesofpoliticalandeconomicpower,andunderstandinghow
political economic factors influence clean energy transitions is crucial to
effective policy formulation and facilitating transitions to sustainable energy
systems. In partnership with the Joint Institute for Strategic Energy Analysis
(JISEA),UNU-WIDERgatheredtogetherasubstantialgroupofexpertsfrom
aroundtheworld—frombothdevelopedanddevelopingcountries—tolaunch
a multidisciplinary research project seeking to contribute to our enhanced
understanding of these factors. The project sought to facilitate an energy
transitionthatwillgenerateverylargeenvironmentalandeconomicbenefits,
particularlyoverthelongrun.Thebeneficiariesofcleanenergytransitionsare
highlydiffuseandincludefuturegenerationsnotyetborn.
This book is the distilled essence of the cross-cutting academic project.
Iexpressmysincereandprofessionalappreciationtothelargegroupofexpert
authorsfortheirdedicationtotheproject,andtomyfelloweditorsinhelping
bringtogetherthebookforreaderstoenjoyandabsorbalongwiththefindings
andpolicyimplications.
FinnTarp
Helsinki,January2017

Acknowledgements
The research project—The Political Economy of Clean Energy Transitions—
wascarriedoutinpartnershipbetweentheUnitedNationsUniversityWorld
InstituteforDevelopmentEconomicsResearch(UNU-WIDER)andtheJoint
Institute for Strategic Energy Analysis (JISEA),1 which is housed within the
NationalRenewableEnergyLaboratory(NREL).We,theeditors,aregrateful
tothestaffsofthetwoinstitutionswhohavehelpedtomakethiscollaboration
smoothandproductive.
Wealsothanktheinternationalteamofauthors—eachofwhomareexperts
in their own fields—for their dedication to the project, and their patience
when reworking and revising the various versions of the individual studies
which now make up the polished chapters of the book. This multi-authored
book would not have been possible without their expert field knowledge and
extremelyvaluableinputs.
Adam Swallow, Economics and Finance Commissioning Editor at Oxford
University Press, provided invaluable guidance, and we are grateful for the
anonymous referee reports that helped sharpen our focus. Particular thanks
also go to Lorraine Telfer-Taivainen, UNU-WIDER’s Senior Editorial and
Publishing Assistant, for all her careful, critically needed, and sustained
publicationsupport,includingthemanycontactswithOUP.
UNU-WIDERgratefullyacknowledgesthesupportandfinancialcontribu-
tions to its research programme by the governments of Denmark, Finland,
Sweden,andtheUnitedKingdom.
DouglasArent,ChanningArndt,MackayMiller,
FinnTarp,andOwenZinaman
1 TheJointInstituteforStrategicEnergyAnalysisisoperatedbytheAllianceforSustainable
Energy,LLC,onbehalfoftheUSDepartmentofEnergy’sNationalRenewableEnergyLabora-
tory, the University of Colorado-Boulder, the Colorado School of Mines, the Colorado State
University,theMassachusettsInstituteofTechnology,andStanfordUniversity.Theviewsand
opinionsofauthorsexpressedhereindonotnecessarilystateorreflectthoseoftheUnitedStates
governmentoranyagencythereof.

Contents
ListofFigures xiii
ListofTables xv
ListofAbbreviations xvii
NotesonContributors xxvii
I. THE POLITICAL ECONOMY OF CLEAN
ENERGY TRANSITIONS
1. IntroductionandSynthesis 3
DouglasArent,ChanningArndt,MackayMiller,FinnTarp,
andOwenZinaman
2. TheHistoryandPoliticsofEnergyTransitions:Comparing
ContestedViewsandFindingCommonGround 16
BenjaminK.Sovacool
II. CLIMATE POLICY
3. CarbonPricingunderPoliticalConstraints:Insightsfor
AcceleratingCleanEnergyTransitions 39
JesseD.JenkinsandValerieJ.Karplus
4. BorderAdjustmentMechanisms:ElementsforEconomic,
Legal,andPoliticalAnalysis 60
JulienBueb,LilianRichieriHanania,andAliceLeClézio
5. SupportPoliciesforRenewables:InstrumentChoiceand
InstrumentChangefromaPublicChoicePerspective 80
ErikGawel,SebastianStrunz,andPaulLehmann
III. INSTITUTIONS AND GOVERNANCE
6. VarietiesofCleanEnergyTransitionsinEurope:
Political-EconomicFoundationsofOnshoreand
OffshoreWindDevelopment 103
StefanĆetković,AronBuzogány,andMirandaSchreurs
7. ThePoliticalEconomyofEnergyInnovation 123
ShouroDasgupta,EnricadeCian,andElenaVerdolini