Carbon lock-in or varieties of lock-in? A study of the consequences of fossil fuel dependency on renewable energy policy Helga Rognstad Master’s Thesis in Political Science Department of Political Science UNIVERSITY OF OSLO Autumn 2017 Words: 28 586 II Carbon lock-in or varieties of lock-in? A study of the consequences of fossil fuel dependency on renewable energy policy III © Helga Rognstad 2017 Carbon lock-in or varieties of lock-in? – A study of the consequences of fossil fuel dependency on renewable energy policy Helga Rognstad http://www.duo.uio.no/ Trykk: Fridtjof Nansen’s Institute, Lysaker IV Summary Fossil fuel dependency, conceptualized by the theory of carbon lock-in, is an often cited explanation for resistance to change in the study of sustainable energy transitions. Although the concept of carbon lock-in provides a good description of the situation in many industrialized countries today, there are several unanswered questions regarding its impli- cations for the politics of energy transition and the development of climate and energy policy. This thesis seeks to understand to what degree and in what ways carbon lock-in may influence renewable energy policy by performing a comparative case study of the renewable energy policy development in three countries that feature characteristics of carbon lock-in. The mechanisms that lead to carbon lock-in are assumed to create mutual dependencies between fossil fuel industries and policymakers, and sustaining lock-in is therefore beneficial for these actors. Furthermore, they are assumed to form a fossil fuel industry-policymaker complex resistant to change towards renewable energies. In this thesis I find support for the expectation that renewable energy policies develop in a way that does not challenge the core interests of this complex in coal dominated Australia and Poland. Norway is a slightly different case. Although it holds important characteristics of a carbon locked-in country due to its high dependency on the petroleum sector in its economy, the electricity sector is almost carbon-free. However, the strong dependency on hydropower in the electricity sector in Norway seems to produce the same type of mechanisms as observed in the cases where fossil fuels dominate electricity generation. Hence, these findings illustrate the need to distinguish between different types of energy related lock-ins, rather than assuming an overall carbon lock-in. Taking into account the potential variety of energy related lock-ins and the particular political and economic interests of the actors that may benefit from sustaining such lock-ins, may provide us with new insights about the development of climate and energy policy required for energy transition. This can help us take a step beyond the generic conclusion that carbon lock-in produces resistance to change towards low-carbon energy sources, and improve our understanding of why resistance to such change persists in some country contexts and not in others. V VI Acknowledgements Several people deserve to be mentioned for their indispensable contribution to this thesis. First of all, my two supervisors Kacper Szulecki (UiO) and Tor Håkon Jackson Inderberg (Fridtjof Nansen Institute) deserve my sincerest gratitude. They have provided me with invaluable academic input, thorough feedback on my drafts and motivating pep-talks when needed. I am truly grateful for all the time and effort you have contributed to my thesis, and for everything I have learned from you both. I would also like to thank the Fridtjof Nansen Institute for providing me with an office space and a master scholarship during the last six months of my degree. A special thanks to the members of the European Program who have provided helpful feedback to my project. It has been a great pleasure to be part of both the academic and social community at the Institute. Furthermore, I would like to thank Malin Østevik, Camilla Fjellvang and Mina Boldermo Eriksen for providing valuable inputs to parts of the thesis. Finally, a special thanks to Jacob Jorem. Your help and support has meant everything to me. All mistakes and inaccuracies remain my own. Lysaker, 15.12.17. VII VIII Table of content Abbreviations ...................................................................................................................... XII 1 Introduction ...................................................................................................................... 1 1.1 Research question ........................................................................................................ 2 1.2 Previous research ......................................................................................................... 2 1.2.1 The contribution of the thesis ............................................................................... 5 1.3 Thesis outline ............................................................................................................... 5 2 Theory and analytical framework .................................................................................. 6 2.1 Carbon lock-in: increasing returns mechanisms and path dependency ....................... 6 2.2 Carbon lock-in critique ................................................................................................ 8 2.3 Translating carbon lock-in into policy outcomes ........................................................ 9 Expectations about renewable energy policy ................................................................... 11 2.4 Summary .................................................................................................................... 13 3 Research design .............................................................................................................. 14 3.1 Comparative case study ............................................................................................. 14 3.2 Case selection ............................................................................................................ 14 3.3 Timeframe ................................................................................................................. 17 3.4 Operationalization ..................................................................................................... 17 3.4.1 Renewable energy policies ................................................................................. 17 3.4.2 Explanatory factors ............................................................................................ 18 3.5 Data ............................................................................................................................ 19 3.5.1 Renewable energy policies ................................................................................. 19 3.5.2 Explanatory factors ............................................................................................ 21 4 Case studies ..................................................................................................................... 22 4.1 Australia..................................................................................................................... 22 4.1.1 Background ........................................................................................................ 22 4.1.2 Renewable energy policies in Australia ............................................................. 26 IX 4.1.3 Discussion .......................................................................................................... 34 4.2 Poland ........................................................................................................................ 39 4.2.1 Background ........................................................................................................ 39 4.2.2 Renewable energy policies in Poland ................................................................. 42 4.2.3 Discussion .......................................................................................................... 50 4.3 Norway ...................................................................................................................... 54 4.3.1 Background ........................................................................................................ 54 4.3.2 Renewable energy policies in Norway ............................................................... 57 4.3.3 Discussion .......................................................................................................... 63 5 Analysis ........................................................................................................................... 68 5.1 Fossil fuel industry-policymaker complex ................................................................ 68 5.2 Renewable energy policies: a challenge to incumbents? ........................................... 70 5.3 Carbon lock-in: a particular type of lock-in?............................................................. 74 6 Conclusion ....................................................................................................................... 78 Literature ................................................................................................................................ 79 Databases .............................................................................................................................. 94 Appendix 1: Carbon lock-in index .......................................................................................