Distributional Politics and Missed Opportunities of Energy Transitions

• In Event: Comparative Politics and the Energy Transition

Abstract

Battling climate change requires ambitious cross-national policy reforms. The most direct - and also pressing - of these is the global energy transition. Because of the size of the industrial adjustments needed for the transition and the known economic and political costs of decarbonization, scholars often argue that a true transformation can only be expedited if the financial conditions of the main stakeholders opposing the transition change dramatically, for example in times of international crisis. Yet, recent events do not suggest this may actually be the case. In this paper we explore why recent international crises that have affected energy markets and therefore offered opportunities for fast-tracking the global energy transition have failed. We argue that, while recent international crises like the Covid-19 pandemic have had the potential to foster the transition, the effects were short-lived because of the very long time horizon of climate policy and the lack of political mobilization around climate change in times of competing political priorities. We first show how the stock values of gas and oil companies relative to renewables firms in Europe have moved after the 2020 onset of the pandemic, eventually producing no new major equilibrium. We further investigate our argument by comparing the market reactions to the pandemic shock with the recent attack of Ukraine and the historical sanctions on Russia. We conclude by evaluating the conditions for new adjustments in internationally exposed sectors in 2022, and discussing if the opportunities for the energy transition are similar or, this time, different.

Authors

• Patrick Bayer, University of Glasgow

• Lorenzo Crippa, University of Strathclyde

• Federica Genovese, University of Oxford