The role of coalitions in renewable energy policy reform

Schmitz (2016) summarises how constituencies have gathered and aligned around climate-relevant policies in China, India, Brazil and South Africa. These cases highlight that framing renewable energy policy around non-climate co-benefits ‒ such as more abundant energy supply and electricity access, the growth of domestic manufacturing of renewable energy components and job creation ‒ are often effective in widening the coalition in support of climate policy. When energy demand exceeds supply, windows of opportunity for renewable energy are created and, based on these cases, incumbent energy industries are less likely to be organised in opposition.

These incumbent interests are historically more likely to be carbon-based fuel sources. However, the case of hydropower in Brazil shows that renewable incumbents may oppose policies that benefit more nascent renewable energies seen as competitors.

China

China, which overtook the US as the world’s largest emitter in 2006, also leads the world in installed wind capacity, reaching 100GW in 2015 (Schmitz, 2016). To date, its most climate-relevant policies have focused on increasing renewable energy production to meet increased energy demand. Its INDC pledges to reduce carbon intensity (GHG emissions per unit of GDP) by 60–65% below 2005 levels, increase non-fossil fuel energy sources to 20% by 2030 and increase its carbon stocks through reforestation (People’s Republic of China, 2015).

China’s Renewable Energy Law of 2006 established the legal foundation and national strategic importance of renewable energy, while assigning responsibility for regulation and policy incentives such as feed-in tariffs, grid connections and research and development (Schmitz, 2016). Renewable energy goals have also been part of China’s five-year strategic plans (Henderson et al., 2016). While the Renewable Energy Law has succeeded in increasing the renewable energy supply, Spratt et al. (2014) find carbon reductions did not play a major motivating role. Instead, the development of the policy was driven by aligned government and business interests in energy security and by developing the manufacturing sector around renewable energy components. Local governments were incentivised to support implementation through opportunities for local economic development, jobs and increased public revenue (Dai, 2015). According to Shen (2016), a coalition of the state and business actors has pushed renewable energy policy in China, including the Energy Bureau of the National Development and Reform Commission, state-owned utility companies and wind and solar parts manufacturers. Notably, they did not encounter political resistance from fossil fuel companies because of China’s rapidly growing energy demand creating a ‘growing pie’ scenario whereby new markets were less contested. Grid companies, local governments and investors have also played intermediary and implementing roles.

While these analyses show that renewable energy policy in 2006 was not driven by climate concerns, environmental concerns ‒ specifically air pollution ‒ were major reasons for China’s 2014 amendments to its Environmental Protection Law (EPL). The amendments removed a cap on fines for polluters, enabled established non-governmental organisations (NGOs) to bring environmental suits against polluters and increased accountability measures for local governments. China’s central government has declared a ‘war on pollution’ (Worland, 2015) in response to increasing evidence of the human health (Rohde & Muller, 2015) and economic costs (Crane & Zhimin, 2015) of air pollution.

The institutional aspects of the EPL amendments and their implementation have relevant implications for climate policy. From an emissions standpoint, older coal plants are being shut down as part of efforts to meet air quality targets (McGarrity, 2015). China’s coal production fell for the first time in 2014 and 2015 (Wong, 2016). The amendments also sent local governments and other implementing authorities a signal that the Ministry of Environment was serious about enforcing pollution standards, both through the increased fines and, somewhat remarkably for an autocratic country, through promoting bottom-up accountability from civil society (Tianjie, 2015). The appointment of Chen Jining as Minister of Environmental Protection marks the first time an environmental scientist has held this position. The Under the Dome documentary produced by a Chinese journalist was ultimately censored by the Chinese government but not before it was viewed at least 150 million times and was publicly praised by Minister Chen (Gardner, 2015). The reaction demonstrates that the Chinese government is sensitive and increasingly responsive to public frustration over the continuing air quality crisis. But it is also a reminder of competing objectives and interests within the central government, where observers perceive the Ministry of Environmental Protection as striving to shift priorities towards greater environmental enforcement. However, the effectiveness of enforcement at the local level will depend on national and local institutional capacity, incentives for local authorities and the technical capacity and independence of courts that hear environmental cases.

India

In recent years, India’s climate-relevant policies have been driven by concerns over climate change adaptation, secure energy access and job creation (Schmitz, 2016), with emission reductions considered a co-benefit. Chaudhary et al. (2014) and Spratt et al. (2014) document the political support that the solar energy sector has attained at both the state and central government levels, as well as from businesses and investors. This can be seen in the creation of the National Solar Mission, part of the National Action Plan on Climate Change. Political support for wind energy has a central role in India’s Action Plan on Climate Change. Key institutional actors in support include the National Ministry of New and Renewable Energy, but the framing of energy security, growing a domestic solar manufacturing industry and job creation were widely attractive to the state and private sector. While wind energy has not gathered the same level of political momentum, neither has been strongly opposed by incumbent fossil fuel interests, given unmet demand for energy to provide electricity access. In this sense, the energy security narrative has critical implications for increasing resilience as well.

Brazil

Unlike China and India, Brazil’s GHG emissions have come predominantly from land use change, particularly deforestation. For decades, Brazil has met its energy needs with a high share of renewables ‒ primarily large hydropower and ethanol ‒ which account for nearly 45% of energy demand today (IEA, 2015). According to Schaeffer et al. (2015) and Viola and Franchini (2014), the government’s support for climate-relevant policies was motivated in part by a desire to be viewed internationally as a progressive rising power. While the majority of emission reduction goals focused on reducing deforestation, more recent climate policies have cut across additional sectors, creating power struggles and conflicts between ministries and rent-seeking industries (Schmitz, 2016). Wind and solar have not taken off in Brazil, despite considerable resources. Wind and solar proponents have found adversaries in the more established hydropower and ethanol producers, demonstrating that the political dynamic is more complex than low-carbon versus high carbon sources, skewing more towards incumbent energy supply interests versus new entrants (Schaeffer et al., 2015). In 2007, Brazil discovered offshore oil reserves, which have been in production since 2011, creating more pressure on the space for renewables. Brazil’s NDC does call for non-hydro renewables to increase to 23% of the energy supply by 2030; however, its overall renewable goal for 2030 is just 45%–which it has already met (Romeiro & Biderman, 2015).

South Africa

The political economy of renewable energy policy in South Africa is heavily influenced by its longstanding coal reserves, which dominate its energy supply (Schmitz, 2016). Referred to as the ‘minerals and energy complex’, a coalition of business, government and trade unions has supported coal power, with the most prominent actor being the vertically integrated state-owned monopoly Eskom (Baker et al., 2015). However, when Eskom was unable to adapt to rapidly growing electricity demand, it created political space for renewables to enter (Morris & Martin, 2015). Morris and Martin describe a heavily contested space that has divided governmental ministries and the private sector, with civil society mostly on the sidelines. The following actors, with their adjacent interests, have supported renewable energy growth:

  • The Clean Energy Branch of the Department of Energy and the Department, which supports greater choice and reliability in energy supply as well as the Department of Treasury, which is also supportive of greater reliability;
  • The Department of Environmental Affairs, concerned with climate action;
  • Portions of the Department of Trade and Industry and independent power producers and associated businesses that stand to benefit from a greater market for wind and solar.

This multi-sectoral constituency is aligned under the Renewable Energy Independent Power Producer Procurement Programme (RE-IPPPP), which is inter-ministerial. The main opposition to renewables comes from Eskom and its allies in the Departments of Public Enterprises and of Minerals and Energy. Morris and Martin (2015) note that the political space was pried open by the international spotlight of COP17, the electricity crisis and the inability of Eskom to promptly respond. A 2013 case study of renewable energy projects procured through RE-IPPPP found that only 4% of potential jobs in operations would go to South Africans, despite RE-IPPPP criteria for local economic development (McDaid & Wood, 2013). Ensuring that green growth benefits actually do reach local populations can be essential in building resilience through poverty alleviation and strengthening political constituencies for implementation.

Vietnam

Zimmer et al. (2015) investigate the political drivers of Vietnam’s recent commitments to decarbonise its economy and find economic restructuring and modernisation, energy security and access to new pools of available international finance are much more salient than carbon mitigation or air quality improvements. The roles of different actors supporting and opposed to climate policies within Vietnam’s Communist Party were not apparent; however, interest group opposition weakened previous environmental policies, such as the Environmental Protection Tax. Vietnam’s Green Growth Strategy includes gradual liberalisation of the power sector and the phase-out of fossil fuel subsidies, which, while ultimately necessary, may present political risks in a country where a sizable portion of the population is vulnerable to electricity price increases.

These cases illustrate that renewable energy policy implementation can become more achievable when multi-stakeholder coalitions recognise their interests are aligned and they can act collectively to strengthen institutions and foster a better enabling environment for implementation. This suggests development partners can work to clarify anticipated impacts from different implementation outcomes to a wider range of actors. Coalitions may need support to seize windows of opportunity when vested interests are politically vulnerable because of energy price volatility, new political narratives or external pressure. Additional factors are emerging that may shift the political landscape and provide opportunities ‒ and risks ‒ for such coalitions. The first is availability of significant increases in climate finance, which will create new incentives (or strengthen existing ones). On the other hand, as climate impacts become more pronounced, they may disrupt existing political narratives and destabilise institutional arrangements.