This abstract presents a book manuscript on how to mobilize the creative destructive potential of capitalism to decarbonize electricity and undergo an energy transition. The manuscript takes capitalism for granted. For all practical purposes, capitalism is the only game in town. Crucially however, capitalism exhibits qualities that should be utilized to accelerate an energy transition. Joseph Schumpeter understood capitalism as rewarding technological innovation, leading to the destruction of inefficient incumbent technologies. A fundamental premise of ours is that creative destruction must be unlocked to replace the combustion of fossil fuels with clean energy flows.
Schumpeter wrote about industry and technology, not politics. However, the climate crisis is an existential crisis, thus a renewable energy transition needs to be politically accelerated. How to do this is the challenge dealt with by our book.
We first provide a historic account of how we got to where we are, from early humans domesticating fire to the Industrial Revolution. We highlight that several of the pathways taken, especially from the Industrial Revolution onwards, where not inevitable, but dependent on contingencies in history and on political battles over who would control the state. Path-dependencies have taken us to our present-day carbonized energy system, but at junctures in history different paths could have been created. A major point is that there are always battles for the control of the state and that the state is always to some extent captured by interests, institutionally and regulatorily. For most of the 20th century onwards, it has been captured by fossil fuel interests. Thus, the state must be re-captured by low-carbon interests.
The subsequent chapters focus on how renewables have become competitive through innovation, how markets have been created, and how renewable energy production has been scaled-up to drive down prices. From each chapter we draw lessons we perceive as universal.
Next, we identify recent/future challenges that if not overcome will prevent any effective climate change response and seek to infer lessons from these as well. First, in a geopolitically charged world, an energy transition must be compatible with basic energy security policies. Second, maintaining popular legitimacy for a massive process of structural change (i.e., energy transition) that will lead to major re-distribution of power and income, and finding politically feasible solutions, is an ever-greater challenge. Third, changing investment patterns and making capitalism work for structural change rather than the perpetuation of fossil fuels, or in other words going from destructive creation (incremental innovation to make fossil fuels slightly less climate-unfriendly) to creative destruction (structural change/energy transition), is essential.
Different lessons arise from the different chapters, but the overarching conclusion is that both the success stories and the failures, both renewable phase-in and fossil phase-out are crucially dependent on politics, on re-capturing the state from fossil interests and on forming strong, robust political alliances that link policy areas (climate, energy, industry, security etc.) and bring as many stakeholders and interests into the fray as possible.
