“New Politics” of Green Energy Transition: Evidence from Europe

• In Event: Environmental Demands, Climate Change and Energy Crises

Abstract

Subsidies given to renewable energy technologies are a critical component of energy transition. Since the early 1990s, a substantive deal of subsidies has been granted to renewable energy sectors to facilitate the green energy transition in Europe. Subsidies, on the other hand, are usually given only temporarily: Once the market for new renewable technologies matures and becomes competitive, the government should gradually roll back subsidies. As the cost of installations decreases over time, there should be a corresponding and timely reduction in subsidy levels. At least, this is what established state aid rules in European countries suggest. In reality, however, it is not always quite easy to achieve such optimal conditions in a subsidy regime: Policy makers often struggle to orchestrate their attempts to reduce subsidies with real-time market conditions. Most importantly, decision-making processes are plagued by the pursuit of particularistic interests, with private interests triumphing over public interests: Once given, it often gets difficult to take back economic privileges like subsidies due to opposition and vested interests in the burgeoning renewable energy sectors. In this research, I aim to test this argument by using a large-N dataset on renewable subsidy levels in OECD countries. To further specify causal pathways in my argument, I also aim to utilize a nested analysis based on case studies from Germany, the United Kingdom and Denmark. In these case studies, I intend to investigate specific episodes for degression in renewable subsidies in which the government ended up doing less degression in subsidies than it had originally planned because of the influence of political veto players and resistance from renewable energy producers.

Author

• Mehmet Hecan, Princeton University