Politics of Green Energy Policy

• Published date: 01 March 2018
• Author: Georgeta Vidican-Auktor,Wilfried Lütkenhorst,Tilman Altenburg,Anna Pegels
• DOI: 10.1177/1070496517747660
• Date: 01 March 2018
• Subject Matter: Articles

Article

Politics of Green

Energy Policy

Anna Pegels

1

, Georgeta Vidican-Auktor

1

,

Wilfried Lu

¨tkenhorst

1

, and

Tilman Altenburg

1

Abstract

The transformation toward sustainability calls for profound renovation of economic

structures, technologies, and institutions. The concept of greenenergy policy, whichwe

define as encompassing any policy measure aimedat aligning the structure of a country’s

energy sector with the needs of sustainable development within established planetary

boundaries, is critical to this end. We elaborate on why the state needs to play an

eminent role in driving the green transformation in general and that of the energy

sector in particular, why thisbrings about coordination challenges with nonstate actors,

and how these can be met. We illustrate these aspects with energy policy examples

from countries of the global South and, where illustrative, North.In particular,we argue

that green energy policy success is subject to three conditions: effectiveness, efficiency,

and legitimacy. These conditions can be achieved by facilitating societal agreement on

the direction of change, forging change alliances, systematic policy learning, and using

market mechanisms to manage policy rents and political capture.

Keywords

renewable energies, energy policy, global south, developing countries, energy

politics, green transformation

Planetary Boundaries and the Next

‘‘Great Transformation’’

The looming danger of catastrophic global warming and negative ef‌fects of

environmental mismanagement have given rise to concerns about economic

development exceeding the earth’s carrying capacity (Rockstro

¨m et al., 2009).

Journal of Environment & Development

2018, Vol. 27(1) 26–45

!The Author(s) 2017

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DOI: 10.1177/1070496517747660

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1

German Development Institute/Deutsches Institut fu¨r Entwicklungspolitik, Bonn, Germany

Corresponding Author:

Anna Pegels, German Development Institute/Deutsches Institut fu¨r Entwicklungspolitik, Bonn, Germany.

Email: anna.pegels@die-gdi.de

In response, an increasing body of literature calls for a societal transformation

to bring the economy back into a safe operating space. Correspondingly, in one

of its recent f‌lagship reports, the German Advisory Council on Global Change

(WBGU, 2011) argued that the transformation toward a low-carbon, sustain-

able global economic system should be radical—on par indeed with the two

great transformations mankind has encountered so far: the prehistoric

Neolithic settlement and the transformation of agrarian into industrial societies

(see also Leggewie & Messner, 2012). The report also points to an important

distinction in that the f‌irst two great transformations were natural, evolutionary

processes while the shift toward a new sustainability paradigm needs to be pre-

dominantly a planned, policy-induced process. Furthermore, based on a broad

consensus in climate science, given the consequences of inaction, this is the f‌irst

transformation with a deadline (Schmitz, Johnson, & Altenburg, 2013).

At the core of this transformation toward sustainable practices is a profound

renovation of economic structures, technologies, and institutions. Economic

systems need to be deeply rethought and redesigned to support decarbonizing.

The energy sector takes center stage, having been responsible for more than 70%

of global emissions in 2012

1

(World Resources Institute, 2016). As the market

alone is failing to bring about these changes—and what is worse, its incentive

structures have caused the current situation—governments must intervene as

drivers of the low-carbon (or green) transformation (Lederer, Wallbott, &

Bauer, 2018). This is a particularly challenging task because market failures

that lock in polluting technologies and preclude sustainable ones are particularly

numerous and critical (Altenburg & Pegels, 2012; Lu

¨tkenhorst, Altenburg,

Pegels, & Vidican, 2014).

We call the set of instruments available to governments to initiate this struc-

tural change ‘‘green energy policy’’. As we understand it, green energy policy

encompasses any policy measure aimed at aligning the structure of a country’s

energy sector with the needs of sustainable development within established

planetary boundaries—both in terms of the absorption capacity of ecosystems

and the availability of natural resources. Such a policy is critical for achieving

the goals of a green economy, an economy that is ‘‘low carbon, resource ef‌f‌icient,

and socially inclusive’’ (United Nations Environment Programme [UNEP],

2011, p. 16). The available instruments of the green energy policy can be grouped

into mandating, incentivizing, and nudging instruments, which are to be applied

to a wide range of subsectors. The systemic nature of the green transformation

furthermore requires the coordination and harmonization of green energy poli-

cies with other policies, such as trade and public investment. By their very

nature, ‘‘green’’ policies need to be

1. designed under conditions of technological uncerta inty, that is, aimed at

nurturing new technologies toward commercial viability (Altenburg &

Lu

¨tkenhorst, 2015);

Pegels et al. 27