The Renewable Energy Transition Energy Path Divergence, Increasing Returns and Mutually Reinforcing Leads in the State-Market Symbiosis

ABSTRACT

This paper argues that mutually reinforcing relations between states and processes of investment, innovation and technological change are facilitating a global energy transition which is making a contribution to global climate challenge mitigation. This process challenges an existing theory of market-capitalism that argues such a change will be institutionally impeded, in part due to short-termist financial pressures on business. The paper argues instead that a pattern of mutually-reinforcing leads involving state and markets is underway, with markets and price changes likely to reduce the costs of climate mitigation and hopefully help embolden states and climate change policy.

Disclosure statement

No potential conflict of interest was reported by the author.

Notes on contributor

Stephen Bell is Professor of Political Economy and former Head of School of the School of Political Science and International Studies at the University of Queensland. He is a Fellow of the Academy of Social Sciences in Australia and an Honorary Professor at the University of Sheffield. His most recent books include Australia's Money Mandarins: The Reserve Bank and the Politics of Money, Cambridge University Press; Rethinking Governance, Cambridge University Press (with A. Hindmoor); The Rise of the People's Bank of China, Harvard University Press (with H. Feng); Masters of the Universe, Slaves of the Market, Harvard University Press (with A. Hindmoor); and Fair Share: Competing Claims and Australia's Economic Future, Melbourne University Press (with M. Keating).

Notes

1 Scientists suggest that the melting of the Greenland icecap could raise sea levels by seven metres, triggered by temperature rises of between 1 and 4 degrees Celsius.

2 Energy regime changes already mean that 85% less energy is now needed to generate each unit of future economic growth than was the case over the last 25 years (IEA 2015, p. 2). These changes also mean that CO₂ emissions from power generation are set to grow at only one fifth the rate of power output increases, a relationship was that was previously one-to-one (IEA 2015, p. 6).

3 The ‘solar discount’ is the difference between the current cost of retail or wholesale electricity provision and the levelised cost of solar electricity (LCOE), which is the net present value of the lifetime total costs of establishing and running a solar electricity system, less the expected lifetime power output of the system.