A Mechanism-Based Framework for Analysing Fossil Fuel Phase-Out

Fossil fuel phase-out is driven and constrained by many different factors including techno-economic trends, socio-technical developments, and policy choices. This means that understanding contractions of carbon-intensive sectors requires combining insights from energy economics, socio-technical transition studies and political science. This paper proposes a novel framework for such interdisciplinary analysis based on the causal mechanisms approach to understanding social phenomena. A mechanism-based tradition of explanation in social science is well-suited for dealing with large-scale phenomena driven by many factors, which are explained through combinations of different mechanisms. Combinations of mechanisms may form feedback loops essential for explaining lock-in or self-reinforcing growth, whereas individual mechanisms can be theorized by different disciplines, thus providing an opportunity for multi-disciplinary integration. This framework also allows the incremental cumulation of knowledge where new insights normally add to rather than dismiss the previous understanding. The paper proposes and empirically illustrates a repertoire of generic mechanisms of contractions of fossil-fuel sectors, including: • Infrastructure aging – older infrastructure is easier to phase-out. • Depletion of domestic resources, which may lead to the phase-out of associated sectors. • Dynamic of energy demand – it is easier to retire energy industries when the demand is declining. • Resistance of vested interests associated with incumbent sectors. • Influence of competing energy sectors and fledging niches. • State goal formation, driven e.g. by import dependence of energy supply or decarbonization objectives. • State action to either slow down or accelerate contraction of a carbon-intensive sector. Taken collectively, these mechanisms help to combine insights from political science, energy economics, and socio-technical studies, while the framework as a whole helps to explain how economic and technological factors interact with the political dynamics influencing the phase-out of carbon intensive energy sectors. The framework is used for cross-case comparison of episodes of fossil fuel sectors contraction observed between 1960 and 2015 worldwide. In addition we use this framework in a large-N comparison based on regression analysis. The generic repertoire of contraction mechanisms informs both our variable selection and the interpretation of results. In particular, we use variables associated with capacity and motivation of actors involved in the functioning of generic contraction mechanisms and interactions between these actors. We identify a significant number of both short- and long-term contraction episodes of different scale and duration. In most of these cases a fossil fuel was replaced by a competing energy source although in some a decrease in demand was also observed. We find that similar economic and technical pressures on carbon-intensive sectors trigger different policy responses in different polities. In states with lower economic and political capacities and when the sector relies on domestic fuels the prevailing policy response is to slow down and ideally to reverse contraction of fossil-fuel sectors. In higher-income and higher-capacity states policy response is to accelerate the contraction while mitigating its social and economic consequences. This is especially common when the contracting sector relies on imported fuels.