The Strategy of Sustainable Energy Transitions: Political Competition and Path Dependence

Abstract

Scholars of environmental politics emphasize the importance of path dependence for sustainable energy transitions, or the extensive deployment of clean energy in a society. However, they frequently overlook the strategic nature of energy policy. We develop a formal model of the political economy of sustainable energy transitions. We examine how exogenous shocks, such as changes in international energy prices, interact with positive reinforcement factors, such as (i) the growing strength of the renewables advocacy coalition and (ii) enhanced economic competitiveness of clean energy. We find that while ‘green’ governments can use positive reinforcement mechanisms to lock in policy commitments (by creating green constituencies), ‘brown’ governments respond to positive reinforcement by strategically underproviding public support for renewable energy (to avoid creating green constituencies). Surprisingly, the effect of positive reinforcement also decreases with international energy prices. The formal analysis, case studies, and data analysis show that (i) political competition conditions the policy response to exogenous shocks and market failures while (ii) governments strategically exploit path dependence for political gain.

Keywords: Environmental, Political Competition, Path Dependency, Energy

JEL Classification: D7, H41, Q2, Q4