Multilevel Governance and Risk Sharing Models for the US Energy Transition

• In Event: Innovation and Risk in the Power Grid

Abstract

As salience associated with realities of climate change increase, the roles and responsibilities for climate change-associated risk are shifting. New frameworks around governing risk have emerged to meet the demands of the present and future world. The variation between the role of the state versus markets to carry climate risk is nuanced, which can depend on politicized conceptualization and quantification of risk and responsibility. Furthermore, these approaches are often quite different when considering the variable roles and responsibilities of the U.S. federal government, individual states, utilities, ratepayers, and industry. This paper adopts a multilevel governance approach to conceptualize different models of layered risk sharing across multiple scales. The main research question is: how have effective multilevel governance risk sharing models evolved over time in the United States to address energy transitions as climate salience increases? The paper investigates federal and subnational empirical cases across three categories of climate risk: mitigation risk – models for derisking early-stage development of renewable energy projects, transition risk – models for distributing the financial burden of early coal retirement, and physical risk – models for climate insurance and disaster management. The paper develops a typology for multi-level risk sharing across the three categories and juxtaposes the typology to international models of risk sharing from the European Union. To conduct this analysis, the paper uses mixed methods, including process tracing, qualitative interviews, textual analysis of regulations and policies around climate risk, and analysis of primary and secondary documents. The paper examines the how risk governance models have evolved and vary across the United States between 2015-2025 through the influence of industry coalitions, civil society, and institutional authority in catalyzing normative change and policy adaptation across cases. Using a regional cross-case comparison and time series analysis are vital to understanding the nuances of risk sharing models and the inherent principles within each model. This paper contributes to the climate politics and mid-transition literatures by creating a theoretical typology of the emergence and evolution of risk sharing models for energy transitions and climate adaptation in the United States.

Author

• Kathryn Chelminski, Brown University
  Presenting Author