The new agenda

Energy for the Future has made a wide range of suggestions for change in the pursuit of energy policy that responds urgently to climate change while not losing sight of other important objectives. But it will not be easy. In particular there are three central dilemmas or tensions with which future policy must struggle.

(i) Stability versus flexibility: Most energy-related investment, small-scale and large, will continue to come from private sources. Private investment needs a stable policy framework if it is to be forthcoming on the scales needed: people will not risk their money if they cannot make reasonable predictions of financial outcomes, and this can be threatened by frequent policy change. On the other hand more policy experimentation is needed, and policy learning is critical. When policies do not work, they need to be revised but this may act as a disincentive to investment.

(ii) Markets versus planning: This is in some ways a false dichotomy, because markets are never 'free' (thought they may be competitive) and governments and regulators set rules of the market game. But the dichotomy is in important respects real. There is a strong desire on the part of many governments to try and set frameworks and let 'the market' deliver. Now, however, more government 'intervention' in markets and other activity will be needed if the urgency of the climate change problem is to be properly acknowledged and tackled. For some this raises the spectre of planning, and the possibility of 'government failure' and over-centralisation. However, it is difficult to see how the necessary speed of change can be induced without stronger governmental action.

(iii) Urgency versus legitimacy: This is perhaps the most difficult tension of all. It is evident that time is short and that carbon emissions in the OECD world need to start falling consistently and substantially in the very near future. But the greater governmental intervention and radical policies needed to achieve this must, as a democratic and pragmatic imperative, carry legitimacy. They will only work if there is political support and a high degree of consensus. This is a hard act for governments to pull off and can only be achieved if it is possible to engage and deliberate with much larger publics than has yet proved possible.

This analysis suggests that the challenges are as much socio-political as technical and economic. Bringing about urgent change of this scope, in the face of these dilemmas, requires real leadership. However, 'heroic' notions of leadership look increasingly outdated in democratic and economically liberal societies where millions of people and organisations control resources and make decisions for themselves, many of which have an impact on energy use. What is needed is therefore leadership of a sort that engages millions of people to make decisions that help to achieve reductions in emissions, and that encourages experimentation and learning. The focus can no longer be only on agency exercised by leaders and policymakers, or by powerful policy actors such as energy utilities.

The enormously difficult decisions societies face around energy technologies will involve a lot of compromise and accommodation between the interests of different groups with varying perspectives. All forms of energy technology have some undesirable environmental, social or economic impacts. Therefore energy policy and decision making need to generate legitimacy in order to carry decisions. However, it is counterproductive to seek legitimacy for instrumental ends: real legitimate authority demands significant devolution of power to decide and control decision-making processes.

The need to generate legitimacy around decisions and policies arises in part because energy systems are characterised by complexity and uncertainty. Many different parts interlock, and many players will need to be involved in system transformations. Long-term investments mean that some aspects of energy systems are effectively locked in, leaving only limited opportunities for change unless a wide range of players can be motivated and coordinated. People will not decide to do things differently if the uncertainties attached are too large and incentives are too weak or conflicting.

However, change can and does happen, so we need to learn from examples of change wherever they happen; there are many examples of 'leadership from below'. How can we build openness to learning, so that innovators are welcomed and supported rather than constantly facing unlikely odds? Learning, flexibility, resilience and diversity are vital considerations in thinking about positive ways to cope with the challenges and devise robust solutions. Both the social and technical networks that comprise our energy systems need to embody these qualities. Moreover, they should do so with a singleness of purpose: that of taking society through the necessary rapid transitions to a low carbon economy in ways that are politically, environmentally and socially sustainable.

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