As the climate science literature stresses, the world will need to return to preindustrial levels of greenhouse gas emissions (GHGs) by 2050 if we want to avoid the worst effects of climate change. And no other sector will need to change as much as the energy industry, since it contributes to over 70 percent of manmade emissions and is mostly (over 80 percent) based on fossil fuel generation from coal, oil, and natural gas. Changing the global energy system is an enormous task full of economic and political challenges. In fact, with the recent drastic cost reductions in wind and solar and the technological advances in storage and electric vehicles, it can be said that the energy transition will face more political hurdles than technical ones.
Given the centrality of environmental concerns and contestation in the distributive impact of policies that promote decarbonization, the politics of energy transition has received growing attention in the political science literature. However, most studies focus on developed nations or China, while the bulk of the growth of energy consumption will come from today’s emerging markets. Kathryn Hochstetler’sbook is a welcome exception and is well timed. This book not only shifts the focus to two large developing economies but also provides a useful framework for further studies in this field by unpacking the dynamics that facilitate or hinder the necessary transition.
Hochstetler identifies four types of political economies of energy transition: climate change, industrial policy, energy distribution and consumption, and siting policy. Each political economy receives a full chapter treatment that largely proceeds through a broader theoretical framework, followed by a process tracing of the policy evolution in Brazil and South Africa. The empirics identify the actors involved in each political economy, the coalition they have built, where contestation happens and why, and what are the distributive implications of the push for renewables in each country. It is a dense, well-researched, qualitative work backed by extensive interviews.
At the broadest level, for climate policies, emission reductions face a classic collective action problem. Limiting climate change through GHG cuts is a public good, with diffuse interest in that goal but concentrated losses to the existing actors in the fossil fuel sector. Thus, it is expected to see the losers mobilizing against policies that threaten their own existence. Furthermore, fossil fuel actors enjoy an incumbency power over actors backing renewables. By virtue of being embedded in physical infrastructure and social institutions, a concept that Gregory C. Unruh called carbon lock-in, the fossil fuel industry has structural and mobilizational power that prevents and delays the energy transition. The classic concept of state capacity is useful to understand how to break from this carbon lock-in. Governments that are able to set policies that privilege long-term strategic needs will more easily challenge the interest of dominant economic sectors whenever public and private interests collide.
Turning to the cases, Brazil and South Africa provide contrasting examples. South Africa is heavily dependent on coal for power supply (95 percent until 2013), while Brazil’s electricity is mostly based on hydroelectricity generation. As expected, the introduction of wind and solar energy in South Africa faced strong opposition from the incumbent fossil fuel player, the state-controlled and near-monopolist parastatal Eskom. Furthermore, a weak state capacity in South Africa compared to Brazil led the energy sector to show weaknesses in planning and state capture that privileged large capital investments (like a proposed nuclear power plant) designed to benefit allies of former president Jacob Zuma in detriment of wind and solar, which was built under a competitive auction process by private players.
Brazil, on the other hand, had its electricity policy formulated and implemented largely by a team of bureaucrats, without similar pressures from fossil fuel players. Not that they do not exist—Petrobras and other oil companies are major economic actors, but not in the electricity sector. Therefore, unlike South Africa, there is little room for additional emission reductions from the electricity sector in Brazil: most of the conflicts about climate policies in the country are about deforestation. Furthermore, a large part of the Brazilian electricity sector had already been privatized (and access nearly universalized) before the introduction of wind and solar, unlike South Africa, where universal access is still lacking and private participation in energy generation is still contested.
In South Africa, Eskom aligned with labor unions in its attempt to block the introduction of renewables. The backdrop of just transition challenges is necessary to understand the resistance from labor, too, which goes beyond South Africa. For instance, in a recent work, Matto Mildenberger calls these left and right climate-blocking alliances the “double representation” of the carbon polluters, supported by industrial unions (fearful of job losses) and business associations of fossil fuel companies (Carbon Captured: How Business and Labor Control Climate Politics, 2020). This emerging literature shows that a large-scale global decarbonization will require building new domestic coalitions, clearly signaling benefits such as job creation, which is one of the goals of Green Industrial Policies (GIPs), a topic Hochstetler addresses in chapter 3.
Industrial policy considerations are critical to understanding Brazil’s early preference for wind over solar. Energy diversification was kick-started in the country in the early 2000s, driven by a technical reason: the need to reduce the reliance on hydroelectricity after a drought in 2001. Unlike solar, wind energy offered more room for locally manufactured components, a common goal of the Brazilian developmental state. Although most electricity was procured by competitive auctions without an explicit local content requirement, favorable financing by Brazil’s development bank (BNDES) created an incentive to purchase from locally based suppliers. With the more recent fall of solar energy prices, both wind and solar are in expansion, with the latter benefiting from favorable decentralized generation incentives, also initially designed by bureaucrats. Overall, renewables in Brazil continue to expand despite top-level political changes, enjoying support from varying political parties like PSDB, PT, and even the climate-change-skeptic President Bolsonaro. It is nonetheless worth highlighting that it has not expanded enough, as Brazil (by late 2021) faced another energy crisis, induced by another drought episode.
Chapter 5 addresses when and why communities might mobilize to try to block or challenge wind or solar power installations. A quick technical detour is necessary to highlight how serious site disputes might become as the world installs more wind and solar. Fossil fuels are dense sources of energy, and with limited land use, a coal power plant can generate loads of 1,000 MW, or about half of the Hoover Dam’s capacity. In contrast, a typical onshore wind power unit will have a nameplate capacity of 2 MW, meaning that you would need to install 500 of them to match the capacity of a single large coal power plant. Furthermore, because the wind is not always blowing, the actual generation (or capacity factor) of coal power plants is much higher than wind plants. Advances in wind and solar technology are gradually increasing the amount of energy harvested per square meter, but there is no doubt that land availability is a critical factor for the expansion of renewables.
In order to systematically analyze community mobilization against solar and wind projects, the author did an internet search and read and coded news items about each project and its host municipality (34 wind farms and 45 solar PV installations in South Africa; 600 and 94, respectively, in Brazil). For wind, Brazil showed a higher level of mobilization (24.7 percent, against 8.8 percent for South Africa), and for both, solar has been virtually growing unopposed. The methodology, however, does not distinguish the intensity of mobilization or shed light on its variation over time. The author also notes that mobilization did not affect actual outcome, as wind generation shows a steep growth in Brazil. Having said that, the study presents evidence that developers have learned to avoid environmentally sensitive areas, such as the paths of migratory birds and dunes, and that environmental agencies have also evolved in how they proceed with their licensing plans.
As the energy transition advances and more land areas will be competing to host renewables, potentially dislodging traditional users, we can expect the salience of this siting political economy to increase. South Africa’s model, which mandates that wind energy developers share part of the benefits of generation with the nearby community (in a radius of 50km), might be a good model for other countries to emulate. However, there is limited evidence that this practice has improved other developmental indicators so far.
Overall, Hochstetler’s book is a fascinating narrative of the energy policy evolution of Brazil and South Africa in four political economies, going beyond the narrower focus on climate disputes alone. From its qualitative depth, readers will be reminded that the push for energy transition may be global, but it will be locally shaped by historical antecedents, the existing balance of power of different economic actors, and institutional factors.
