Skip to main content Accessibility help

We use cookies to distinguish you from other users and to provide you with a better experience on our websites. Close this message to accept cookies or find out how to manage your cookie settings.

Close cookie message
×
Hostname: page-component-78c5997874-mlc7c Total loading time: 0 Render date: 2024-11-14T06:58:55.623Z Has data issue: false hasContentIssue false

1 - Policy Frameworks and Institutions for Decarbonisation: The Energy Sector as ‘Litmus Test’

Published online by Cambridge University Press:  08 October 2021

By
Lynette Molyneaux  and
Keith Sue
Edited by
Kenneth G. H. Baldwin ,
Mark Howden ,
Michael H. Smith ,
Karen Hussey  and
Peter J. Dawson
Kenneth G. H. Baldwin
Affiliation:
Australian National University, Canberra
Mark Howden
Affiliation:
Australian National University, Canberra
Michael H. Smith
Affiliation:
Australian National University, Canberra
Karen Hussey
Affiliation:
University of Queensland
Peter J. Dawson
Affiliation:
P. J. Dawson & Associates
Get access

Summary

Reducing greenhouse gas emissions is an economy-wide challenge so policy to reduce emissions has to accommodate varying scope and scale to reach all sectoral processes. This chapter focuses on the complexity and challenges inherent in developing climate policy for electricity supply and for energy use in all industry and transport sectors. Policy frameworks need to take account of the context, competing social and economic objectives, global competitiveness and the expectations of industry participants and consumers. Energy policy to accommodate climate imperatives will always involve integrating policy into existing frameworks, which adds to the layers of complexity. The advantages and disadvantages of the variety of tools required to create incentives for investment, consumer behaviour change and institutional adaptation are also considered. Inevitably, policy formulation will involve hard political choices, so the chapter concludes with thoughts on managing the politics.

Keywords

Climate policyenergy policyclimate politics
Type
Chapter
Information
Transitioning to a Prosperous, Resilient and Carbon-Free Economy
A Guide for Decision-Makers
 , pp. 7 - 38
Publisher: Cambridge University Press
Print publication year: 2021

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

AAP (Australian Associated Press) (2017). SA to go it alone on power quest. SBS Korean. 10 February. Available at: www.sbs.com.au/language/english/sa-to-go-it-alone-on-power-quest.Google Scholar
AEMC (Australian Energy Market Commission) (2012). Power of Choice Review: Giving Consumers Options in the Way They Use Electricity. Sydney: Australian Energy Market Commission.Google Scholar
AEMO (Australian Energy Market Operator) (2019). Integrated System Plan (ISP). Melbourne: Australian Energy Market Operator. Available at: www.aemo.com.au/Electricity/National-Electricity-Market-NEM/Planning-and-forecasting/Integrated-System-Plan.Google Scholar
Anderson, P. and Tushman, M. L. (1990). Technological discontinuities and dominant designs: A cyclical model of technological change. Administrative Science Quarterly, 35, 604–633.Google Scholar
Arthur, W. B. (1989). Competing technologies, increasing returns, and lock-in by historical events. The Economic Journal, 99, 116–131.Google Scholar
Asian Renewable Energy Hub (2018). Renewable Energy at Oil and Gas Scale. Available at: https://asianrehub.com/.Google Scholar
Baer, H. A. (2016). The nexus of the coal industry and the state in Australia: Historical dimensions and contemporary challenges. Energy Policy, 99, 194–202.Google Scholar
Barbier, E. B. (2003). The role of natural resources in economic development. Australian Economic Papers, 42, 253–272.Google Scholar
Bayulgen, O. and Ladewig, J. W. (2017). Vetoing the future: Political constraints and renewable energy. Environmental Politics, 26, 49–70.Google Scholar
Brown, M. A. and Sovacool, B. (2011). Barriers to the diffusion of climate-friendly technologies. International Journal of Technology Transfer and Commercialization, 10, 43–62.Google Scholar
CAIT Climate Data Explorer (2019). Country Greenhouse Gas Emissions. Washington, DC: World Resources Institute. Available at: http://cait.wri.org.Google Scholar
Chan, G. (2017). Coalition says it may change Clean Energy Finance Corporation rules to fund coal plants. The Guardian. 19 February.Google Scholar
Christensen, C. M. (1997). The Innovator’s Dilemma: How New Technologies Cause Great Firms to Fail. Boston, MA: Harvard Business School Press.Google Scholar
Compston, H. and Bailey, I. (2012). Climate Clever: How Governments Can Tackle Climate Change (and Still Win Elections). Florence, KY: Taylor and Francis.Google Scholar
Coorey, P. (2019). Coalition eyes funding for carbon capture. Australian Financial Review. 18 November.Google Scholar
CPUC (California Public Utilities Commission) (2019). Integrated Resource Plan and Long Term Procurement Plan (IRP-LTPP). San Francisco, CA: California Public Utilities Commission. Available at: www.cpuc.ca.gov/irp/.Google Scholar
cwpRenewables (2018). Asian Renewable Energy Hub. Available at: https://cwprenewables.com/projects/asian-renewable-energy-hub/.Google Scholar
Douglas, S. and Walker, A. (2017). Coal mining and the resource curse in the Eastern United States. Journal of Regional Science, 57, 568–590.Google Scholar
Eurelectric (2015). A Reference Model for European Capacity Markets. Eurelectric position paper. Available at: www.eurelectric.org/media/1918/a_reference_model_for_european_capacity_markets-2015-030-0145-01-e.pdf.Google Scholar
European Commission (2009). European Energy Programme for Recovery. Brussels: European Commission. Available at: http://ec.europa.eu/energy/eepr/projects/.Google Scholar
European Commission (2011). A Roadmap for Moving to a Competitive Low Carbon Economy in 2050. Brussels: European Commission. Available at: www.europarl.europa.eu/meetdocs/2009_2014/documents/com/com_com(2011)0112_/com_com(2011)0112_en.pdf [English translation].Google Scholar
Garnaut, R. (2019). Superpower: Australia’s Low-Carbon Opportunity. Melbourne: La Trobe University Press.Google Scholar
German AEE (Renewable Energies Agency) (2016). Acceptance of renewable energy in Germany. Available at: www.unendlich-viel-energie.de/english/acceptance-of-renewable-energy-in-germany.Google Scholar
German, AEE (2019). Important for the fight against climate change: Citizens want more renewable energies. Available (in German) at: www.unendlich-viel-energie.de/akzeptanzumfrage-2019.Google Scholar
German BMU (Federal Ministry of the Environment, Nature Conservation and Nuclear Safety) (2009). Cost and Benefit Effects of Renewable Energy Expansion in the Renewable and Heat Sectors. Berlin: German Federal Ministry of the Environment, Nature Conservation and Nuclear Safety. Available at: www.ctc-n.org/resources/cost-and-benefit-effects-renewable-energy-expansion-german-power-and-heat-market.Google Scholar
Goodman, J. (2008). The minerals boom and Australia’s resource curse. Journal of Australian Political Economy, 61, 201–219.Google Scholar
Han, J. and Yun, S.-J. (2015). An analysis of the electricity consumption reduction potential of electric motors in the South Korean manufacturing sector. Energy Efficiency, 8, 1035–1047.Google Scholar
Harrington, W., Morgenstern, R. D. and Sterner, T., eds. (2004). Choosing Environmental Policy: Comparing Instruments and Outcomes in the United States and Europe. Washington, DC: Resources for the Future.Google Scholar
Healy, N. and Barry, J. (2017). Politicizing energy justice and energy system transitions: Fossil fuel divestment and a ‘just transition’. Energy Policy, 108, 451–459.Google Scholar
Hendryx, M. (2011). Poverty and mortality disparities in Central Appalachia: Mountaintop mining and environmental justice. Journal of Health Disparities Research and Practice, 4, 44–53.Google Scholar
Hirst, E. and Brown, M. (1990). Closing the efficiency gap: Barriers to the efficient use of energy. Resources, Conservation and Recycling, 3, 267–281.Google Scholar
IEA (International Energy Agency) (2014). Emissions Reduction through Upgrade of Coal-Fired Power Plants: Learning from Chinese Experience. Paris: OECD.Google Scholar
IEA (2019a). SDG7: Data and Projections: Access to Affordable, Reliable, Sustainable and Modern Energy for All. Paris: International Energy Agency. Available at: www.iea.org/reports/sdg7-data-and-projections/access-to-electricity#abstract.Google Scholar
IEA (2019b). World energy balances. IEA World Energy Statistics and Balances [database]. Available at: https://doi.org/10.1787/data-00512-en.Google Scholar
IEA (2019c). CO2 emissions by product and flow. IEA CO2 Emissions from Fuel Combustion Statistics [database]. Available at: https://doi.org/10.1787/data-00430-en.Google Scholar
IEA (2019d). World Energy Outlook 2019. Paris: International Energy Agency.Google Scholar
Jakob, M. and Steckel, J. C. (2014). How climate change mitigation could harm development in poor countries. WIREs Climate Change, 5, 161–168.Google Scholar
Jasper, J. M. (2014). Nuclear Politics: Energy and the State in the United States, Sweden, and France. Princeton: Princeton University Press.CrossRefGoogle Scholar
Joas, F., Pahle, M., Flachsland, C. and Joas, A. (2016). Which goals are driving the Energiewende? Making sense of the German Energy Transformation. Energy Policy, 95, 42–51.Google Scholar
King, S. (2015). Smart meters, dumb policy: The Victorian experience. The Conversation. 17 September. Available at: https://theconversation.com/smart-meters-dumb-policy-the-victorian-experience-47685.Google Scholar
Künneke, R. W. (2008). Institutional reform and technological practice: The case of electricity. Industrial and Corporate Change, 17, 233–265.Google Scholar
Lazard (2019). Levelized cost of energy analysis: Version 13. Lazard. 7 November. Available at: www.lazard.com/perspective/lcoe2019.Google Scholar
Lenhart, S., Nelson-Marsh, N., Wilson, E. J. and Solan, D. (2016). Electricity governance and the Western energy imbalance market in the United States: The necessity of interorganizational collaboration. Energy Research & Social Science, 19, 94–107.CrossRefGoogle Scholar
Lewin, P. G. (2017). ‘Coal is not just a job, it’s a way of life’: The cultural politics of coal production in Central Appalachia. Social Problems, 66, 51–68.Google Scholar
Mahmoudi, N., Heydarian-Forushani, E., Shafie-Khah, M., Saha, T. K., Golshan, M. E. H. and Siano, P. (2017). A bottom-up approach for demand response aggregators’ participation in electricity markets. Electric Power Systems Research, 143, 121–129.Google Scholar
Mayer, A. (2018). A just transition for coal miners? Community identity and support from local policy actors. Environmental Innovation and Societal Transitions, 28, 1–13.CrossRefGoogle Scholar
Meadowcroft, J. (2011). Engaging with the politics of sustainability transitions. Environmental Innovation and Societal Transitions, 1, 70–75.Google Scholar
Merzian, R., Quicke, A., Bennett, E., Campbell, R. and Swann, T. (2019). Climate of the Nation. Research report. Canberra: The Australia Institute. Available at: https://australiainstitute.org.au/report/climate-of-the-nation-2019/.Google Scholar
Metherell, L. and Hawley, S. (2013). Tony Abbott says ETS a ‘market in an invisible substance’; Labor denies scrapping carbon price will leave $6bn budget hole. ABC News. 15 July. Available at: www.abc.net.au/news/2013-07-15/abbott-dismisses-ets-as-market-in-an-invisible-substance/4820564.Google Scholar
Moe, E. (2010). Energy, industry and politics: Energy, vested interests, and long-term economic growth and development. Energy, 35, 1730–1740.Google Scholar
Molyneaux, L., Brown, C., Wagner, L. and Foster, J. (2016). Measuring resilience in energy systems: Insights from a range of disciplines. Renewable and Sustainable Energy Reviews, 59, 1068–1079.CrossRefGoogle Scholar
Neill, K. A. and Morris, J. C. (2012). A tangled web of principals and agents: Examining the Deepwater Horizon oil spill through a principal-agent lens. Politics and Policy, 37, 1047–1072.Google Scholar
Nelson, R. R. (1995). Recent evolutionary theorizing about economic change. Journal of Economic Literature, 33, 48–90.Google Scholar
Ordanini, A., Miceli, L., Pizzetti, M. and Parasuraman, A. (2022). Crowd-funding: Transforming customers into investors through innovative service platforms. Journal of Service Management, 22, 443–470.Google Scholar
Osofsky, H. and Wiseman, H. (2014). Hybrid energy governance. University of Illinois Law Review, 2014, 1–66.Google Scholar
Parliament of Australia (2011). Commonwealth Parliamentary Debates, House of Representatives. No. 14, 2011. Wednesday, 21 September. Canberra: Hansard.Google Scholar
Parliament of Australia (2016). Corporations Amendment (Crowd-Sourced Funding) Bill: Explanatory Memorandum. Canberra: Parliament of Australia. Available at: www.aph.gov.au/Parliamentary_Business/Bills_Legislation/Bills_Search_Results/Result?bId=r5766.Google Scholar
Pew Research Center (2016). The Politics of Climate [survey]. Available at: www.pewresearch.org/science/2016/10/04/the-politics-of-climate/.Google Scholar
Pregger, T., Nitsch, J. and Naegler, T. (2013). Long-term scenarios and strategies for the deployment of renewable energies in Germany. Energy Policy, 59, 350–360.Google Scholar
Reserve Bank of Australia (2013). Statement on the conduct of monetary policy. Reserve Bank of Australia. 24 October. Available at: www.rba.gov.au/monetary-policy/framework/stmt-conduct-mp-6-24102013.html.Google Scholar
Rhys, J. (2010). Reforming UK electricity markets. Oxford Energy Forum, 81, 20–23. Available at: www.oxfordenergy.org/wpcms/wp-content/uploads/2011/02/OEF-81.pdf.Google Scholar
Rhys, J. (2014). Back to the CEGB? Greater central control of UK energy may be inevitable. The Conversation. 9 May. Available at: https://theconversation.com/back-to-the-cegb-greater-central-control-of-uk-energy-may-be-inevitable-26474.Google Scholar
Sachs, J. D. and Warner, A. M. (1997). Fundamental sources of long-run growth. The American Economic Review, 87, 184–188.Google Scholar
Scobie, C. (2016). Supreme Court stays EPA’s clean power plan. American Bar Association. 17 February. Available at: www.americanbar.org/groups/litigation/committees/environmental-energy/practice/2016/021716-energy-supreme-court-stays-epas-clean-power-plan/.Google Scholar
Simshauser, P. (2019). Missing money, missing policy and resource adequacy in Australia’s National Electricity Market. Utilities Policy, 60.Google Scholar
St John, A. (2016). What’s happening with ARENA? Flagpost. 19 September. Available at: www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/FlagPost/2016/September/ARENA-changes.Google Scholar
Sue, K., Macgill, I. and Hussey, K. (2014). Distributed energy storage in Australia: Quantifying potential benefits, exposing institutional challenges. Energy Research & Social Science, 3, 16–29.Google Scholar
Tellus (2000). Best Practices Guide: Integrated Resource Planning for Electricity. Washington, DC: United States Agency for International Development.Google Scholar
Teske, S. (2019). Achieving the Paris Climate Agreement Goals: Global and Regional 100% Renewable Energy Scenarios with Non-Energy GHG Pathways for +1.5 °C and +2 °C. Switzerland: Springer Nature.Google Scholar
The White House (2016). United States Mid-Century Strategy for Deep Decarbonization. Washington, DC: The White House. Available at: https://unfccc.int/files/focus/long-term_strategies/application/pdf/mid_century_strategy_report-final_red.pdf.Google Scholar
Thomas, S. (2016). A perspective on the rise and fall of the energy regulator in Britain. Utilities Policy, 39, 41–49.Google Scholar
Tong, D., Zhang, Q., Zheng, Y., Caldeira, K., Shearer, C., Hong, C., Qin, Y. and Davis, S. J. (2019). Committed emissions from existing energy infrastructure jeopardize 1.5°C climate target. Nature, 572, 373–377.Google Scholar
UK CCC (Committee on Climate Change) (2008). Building a Low-Carbon Economy: The UK’s Contribution to Tackling Climate Change. London: UK Committee on Climate Change.Google Scholar
UK CCC (2009). Meeting Carbon Budgets: The Need for a Step Change. London: UK Committee on Climate Change.Google Scholar
UK GIG (Green Investment Group) (2019). Progress Report: Accelerating the Transition to a Greener Global Economy. Sydney: UK Green Investment Group. Available at: https://greeninvestmentgroup.com/media/230066/gig-progress-report-2019_final-a4.pdf.Google Scholar
UK OFGEM (Office of Gas and Electricity Markets) (2016). Integrated Transmission Planning and Regulation. UK Office of Gas and Electricity Markets. Available at: www.ofgem.gov.uk/electricity/transmission-networks/integrated-transmission-planning-and-regulation.Google Scholar
Unruh, G. C. (2000). Understanding carbon lock-in. Energy Policy, 28, 817–830.Google Scholar
US DOE (Department of Energy) (1978). Power Plant and Industrial Fuel Use Act. energy.gov. Available at: https://energy.gov/oe/services/electricity-policy-coordination-and-implementation/other-regulatory-efforts/power-plant.Google Scholar
US EIA (Energy Information Administration) (2019a). Existing nameplate and net summer capacity by energy source, producer type and state (EIA-860) [data resource]. US Energy Information Administration. Available at: www.eia.gov/electricity/data/state/.Google Scholar
US EIA (2019b). Table 9.1 emissions from energy consumption at power plants [data resource]. US Energy Information Administration. Available at: www.eia.gov/electricity/data.php#elecenv.Google Scholar
US EPA (Environmental Protection Agency) (2015). Overview of the Clean Power Plan: Cutting carbon pollution from power plants. United States Environmental Protection Agency. Available at: https://archive.epa.gov/epa/cleanpowerplan/fact-sheet-overview-clean-power-plan.html.Google Scholar
US EPA (2019). Affordable Clean Energy Rule. United States Environmental Protection Agency. Available at: www.epa.gov/stationary-sources-air-pollution/affordable-clean-energy-rule.Google Scholar
Wang, X. and Lin, B. (2017). Impacts of residential electricity subsidy reform in China. Energy Efficiency, 10, 499–511.Google Scholar
Wang, Y. and Brown, M. A. (2014). Policy drivers for improving electricity end-use efficiency in the USA: An economic–engineering analysis. Energy Efficiency, 7, 517–546.Google Scholar
Warren, B., Christoff, P. and Green, D. (2016). Australia’s sustainable energy transition: The disjointed politics of decarbonisation. Environmental Innovation and Societal Transitions, 21, 1–12.Google Scholar
Williamson, O. E. (1998). Transaction cost economics: How it works; where it is headed. De Economist, 146, 23–58.Google Scholar
Wirth, H. (2017). Recent Facts about Photovoltaics in Germany. Freiburg: Fraunhofer Institute.Google Scholar

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×