Political Competition, Path Dependence, and the Strategy of Sustainable Energy Transitions

TLDR

Previous research emphasizes the importance of path dependence for sustainable energy transitions, yet its strategic dimension is often neglected. The study formally examines how exogenous shocks, such as changes in international energy prices, interact with positive reinforcement from the growing renewables advocacy coalition. The authors employ a formal model to analyze this interaction. Political competition modifies the impact of path dependence, with green governments leveraging positive reinforcement to lock in policy commitments, brown governments strategically underproviding support to avoid green constituencies, and the reinforcement effect weakening as international energy prices rise, as confirmed by empirical analysis.

Abstract

Previous research emphasizes the importance of path dependence for sustainable energy transitions, but their strategic nature is frequently overlooked. We examine formally how exogenous shocks, such as changes in international energy prices, interact with positive reinforcement factors, such as the growing strength of the renewables advocacy coalition. We find that political competition modifies the effect of path dependence on policy and outcomes. Specifically, while “green” governments can use positive reinforcement mechanisms to lock in policy commitments (by creating green constituencies), “brown” governments strategically underprovide public support for renewable energy (to avoid creating green constituencies). The effect of positive reinforcement also decreases with international energy prices. Our empirical analysis shows that (1) political competition conditions the policy response to exogenous shocks and market failures, while (2) governments strategically exploit path dependence for political gain.