Political economy of energy

Often presented as a bridge technology to a future zero-carbon energy system, natural gas infrastructure expansion remains hotly debated. Here Kemfert et al. discuss recent research to argue how such expansion hinders climate targets and energy transitions and suggest how research can support better planning.

This study indicates that approximately 5.8 TW of wind and solar photovoltaic capacity would be required to achieve carbon neutrality in China’s power system by 2050. The electricity supply costs would increase by 19.9% or 9.6 CNY¢/kWh.

The necessary and rapid transition to a low-carbon economy will lead to massive stranded assets, which could risk the stability of financial markets and the economy. Through a global equity network, most risk and responsibility is owned by investors, such as pension funds, in developed countries.

The traditional understanding of obstacles to climate change action highlights economic costs and free-riding. Mercure et al. show that, in contrast, climate action in many regions is economically favourable and advancing rapidly, but to avoid potentially destabilizing levels of stranded fossil fuel assets demands urgent and rapid economic diversification.

Growth of wind and solar energy share demonstrates different dynamics between the initial phases of adoption as compared with the advanced stages. Cherp et al. study the growth dynamics of renewable energy and show that laggards may continue to struggle to achieve high growth rates despite learning from early adopters’ experience.