IDEAS home Printed from https://ideas.repec.org/a/eee/appene/v222y2018icp772-780.html
   My bibliography  Save this article

Finance and justice in low-carbon energy transitions

Author

Listed:
  • Hall, Stephen
  • Roelich, Katy E.
  • Davis, Mark E.
  • Holstenkamp, Lars

Abstract

Up to $61trillion of power systems investment is needed to fulfil the Paris Agreement. The mobilisation of so much capital is a huge challenge. As such, energy policy is changing to meet the needs of commercial finance. However, very little has been done to question the justice implications of this capital mobilisation, and what alternatives there are to commercially-oriented finance for low carbon energy systems. This paper uses a comparative analysis of two developed economies to explore how ‘alternative’ forms of finance operate in each nation’s energy investment landscape. We find alternative finance is often set in opposition to commercial capital. Alternative finance in both nations is motivated by financial justice outcomes that are poorly understood in current energy policy. Our findings suggest that 6 principles are key to ‘just’ energy finance: affordability, good governance, due process, intra-generational equity, spatial equity, and financial resilience. Energy policy that seeks to mobilise capital, should take account of all six principles.

Suggested Citation

  • Hall, Stephen & Roelich, Katy E. & Davis, Mark E. & Holstenkamp, Lars, 2018. "Finance and justice in low-carbon energy transitions," Applied Energy, Elsevier, vol. 222(C), pages 772-780.
    • Handle: RePEc:eee:appene:v:222:y:2018:i:c:p:772-780
    DOI: 10.1016/j.apenergy.2018.04.007
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S030626191830549X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.apenergy.2018.04.007?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Heffron, Raphael J. & McCauley, Darren, 2017. "The concept of energy justice across the disciplines," Energy Policy, Elsevier, vol. 105(C), pages 658-667.
    2. Komendantova, Nadejda & Patt, Anthony & Barras, Lucile & Battaglini, Antonella, 2012. "Perception of risks in renewable energy projects: The case of concentrated solar power in North Africa," Energy Policy, Elsevier, vol. 40(C), pages 103-109.
    3. World Bank & International Monetary Fund, 2016. "Financial Sector Assessment Program," World Bank Publications - Reports 24124, The World Bank Group.
    4. Masini, Andrea & Menichetti, Emanuela, 2012. "The impact of behavioural factors in the renewable energy investment decision making process: Conceptual framework and empirical findings," Energy Policy, Elsevier, vol. 40(C), pages 28-38.
    5. Leete, Simeon & Xu, Jingjing & Wheeler, David, 2013. "Investment barriers and incentives for marine renewable energy in the UK: An analysis of investor preferences," Energy Policy, Elsevier, vol. 60(C), pages 866-875.
    6. Newbery, David M., 2016. "Towards a green energy economy? The EU Energy Union’s transition to a low-carbon zero subsidy electricity system – Lessons from the UK’s Electricity Market Reform," Applied Energy, Elsevier, vol. 179(C), pages 1321-1330.
    7. Andrea Masini & E. Menichetti, 2012. "The impact of behavioural factors in the renewable energy investment decision making process: Conceptual framework and empirical findings," Post-Print hal-00651706, HAL.
    8. International Monetary Fund, 2016. "United Kingdom: Financial Sector Assessment Program-Financial System Stability Assessment," IMF Staff Country Reports 2016/167, International Monetary Fund.
    9. Krupa, Joel & Harvey, L.D. Danny, 2017. "Renewable electricity finance in the United States: A state-of-the-art review," Energy, Elsevier, vol. 135(C), pages 913-929.
    10. World Bank & International Monetary Fund, 2016. "Financial Sector Assessment Program," World Bank Publications - Reports 24126, The World Bank Group.
    11. World Bank & International Monetary Fund, 2016. "Financial Sector Assessment," World Bank Publications - Reports 26017, The World Bank Group.
    12. Stephen Hall & Timothy J Foxon & Ronan Bolton, 2017. "Investing in low-carbon transitions: energy finance as an adaptive market," Climate Policy, Taylor & Francis Journals, vol. 17(3), pages 280-298, April.
    13. Ronan Bolton & Timothy J Foxon & Stephen Hall, 2016. "Energy transitions and uncertainty: Creating low carbon investment opportunities in the UK electricity sector," Environment and Planning C, , vol. 34(8), pages 1387-1403, December.
    14. Strantzali, Eleni & Aravossis, Konstantinos, 2016. "Decision making in renewable energy investments: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 55(C), pages 885-898.
    15. Holstenkamp, Lars & Kahla, Franziska, 2016. "What are community energy companies trying to accomplish? An empirical investigation of investment motives in the German case," Energy Policy, Elsevier, vol. 97(C), pages 112-122.
    16. Sovacool, Benjamin K. & Dworkin, Michael H., 2015. "Energy justice: Conceptual insights and practical applications," Applied Energy, Elsevier, vol. 142(C), pages 435-444.
    17. Bouzarovski, Stefan & Simcock, Neil, 2017. "Spatializing energy justice," Energy Policy, Elsevier, vol. 107(C), pages 640-648.
    18. Hiteva, Ralitsa & Sovacool, Benjamin, 2017. "Harnessing social innovation for energy justice: A business model perspective," Energy Policy, Elsevier, vol. 107(C), pages 631-639.
    19. Arnold, Uwe & Yildiz, Özgür, 2015. "Economic risk analysis of decentralized renewable energy infrastructures – A Monte Carlo Simulation approach," Renewable Energy, Elsevier, vol. 77(C), pages 227-239.
    20. Canes, Michael E., 2017. "The inefficient financing of federal agency energy projects," Energy Policy, Elsevier, vol. 111(C), pages 28-31.
    21. Cumming, Douglas J. & Leboeuf, Gael & Schwienbacher, Armin, 2017. "Crowdfunding cleantech," Energy Economics, Elsevier, vol. 65(C), pages 292-303.
    22. Jeremy C. Short & David J. Ketchen Jr. & Aaron F. McKenny & Thomas H. Allison & R. Duane Ireland, 2017. "Research on Crowdfunding: Reviewing the (Very Recent) past and Celebrating the Present," Entrepreneurship Theory and Practice, , vol. 41(2), pages 149-160, March.
    23. World Bank & International Monetary Fund, 2016. "Financial Sector Assessment Program," World Bank Publications - Reports 24125, The World Bank Group.
    24. Blyth, William & McCarthy, Rory & Gross, Robert, 2015. "Financing the UK power sector: Is the money available?," Energy Policy, Elsevier, vol. 87(C), pages 607-622.
    25. Benjamin K. Sovacool & Raphael J. Heffron & Darren McCauley & Andreas Goldthau, 2016. "Energy decisions reframed as justice and ethical concerns," Nature Energy, Nature, vol. 1(5), pages 1-6, May.
    26. Yildiz, Özgür, 2014. "Financing renewable energy infrastructures via financial citizen participation – The case of Germany," Renewable Energy, Elsevier, vol. 68(C), pages 677-685.
    27. Polzin, Friedemann, 2017. "Mobilizing private finance for low-carbon innovation – A systematic review of barriers and solutions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 525-535.
    28. World Bank & International Monetary Fund, 2016. "Financial Sector Assessment," World Bank Publications - Reports 24123, The World Bank Group.
    29. Volker Berghahn & Brigitte Young, 2013. "Reflections on Werner Bonefeld's 'Freedom and the Strong State: On German Ordoliberalism' and the Continuing Importance of the Ideas of Ordoliberalism to Understand Germany's (Contested) Role in Resol," New Political Economy, Taylor & Francis Journals, vol. 18(5), pages 768-778, October.
    30. Tobias S. Schmidt, 2014. "Low-carbon investment risks and de-risking," Nature Climate Change, Nature, vol. 4(4), pages 237-239, April.
    31. A. Bumpus & S. Comello, 2017. "Emerging clean energy technology investment trends," Nature Climate Change, Nature, vol. 7(6), pages 382-385, June.
    32. Goran Calic & Elaine Mosakowski, 2016. "Kicking Off Social Entrepreneurship: How A Sustainability Orientation Influences Crowdfunding Success," Journal of Management Studies, Wiley Blackwell, vol. 53(5), pages 738-767, July.
    33. World Bank & International Monetary Fund, 2016. "Financial Sector Assessment Program," World Bank Publications - Reports 24127, The World Bank Group.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yu Sun & Huaping Sun & Lizhen Chen & Farhad Taghizadeh-Hesary & Guimei Zhao, 2020. "Impact of natural-resource dependence on foreign contracting projects of China: A spatial panel threshold approach," PLOS ONE, Public Library of Science, vol. 15(6), pages 1-11, June.
    2. Luiz de Mello, 2023. "Real Estate in a Post-Pandemic World: How Can Policies Make Housing More Enviromentally Sustainable and Affordable?," Hacienda Pública Española / Review of Public Economics, IEF, vol. 244(1), pages 111-139, March.
    3. Thomas Lagoarde-Segot, 2020. "Financing the Sustainable Development Goals," Sustainability, MDPI, vol. 12(7), pages 1-22, April.
    4. Jenny Palm, 2021. "The Transposition of Energy Communities into Swedish Regulations: Overview and Critique of Emerging Regulations," Energies, MDPI, vol. 14(16), pages 1-15, August.
    5. Jekaterina Kuzmina & Dzintra Atstaja & Maris Purvins & Guram Baakashvili & Vakhtang Chkareuli, 2023. "In Search of Sustainability and Financial Returns: The Case of ESG Energy Funds," Sustainability, MDPI, vol. 15(3), pages 1-16, February.
    6. Sun, Yu & Chen, Lizhen & Sun, Huaping & Taghizadeh-Hesary, Farhad, 2020. "Low-carbon financial risk factor correlation in the belt and road PPP project," Finance Research Letters, Elsevier, vol. 35(C).
    7. Dillman, K.J. & Heinonen, J., 2022. "A ‘just’ hydrogen economy: A normative energy justice assessment of the hydrogen economy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    8. Polzin, Friedemann & Egli, Florian & Steffen, Bjarne & Schmidt, Tobias S., 2019. "How do policies mobilize private finance for renewable energy?—A systematic review with an investor perspective," Applied Energy, Elsevier, vol. 236(C), pages 1249-1268.
    9. Tu, Chuc Anh & Rasoulinezhad, Ehsan & Sarker, Tapan, 2020. "Investigating solutions for the development of a green bond market: Evidence from analytic hierarchy process," Finance Research Letters, Elsevier, vol. 34(C).
    10. Brown, Donal & Hall, Stephen & Davis, Mark E., 2019. "Prosumers in the post subsidy era: an exploration of new prosumer business models in the UK," Energy Policy, Elsevier, vol. 135(C).
    11. Qianqian Guo & Zhifang Su & Chaoshin Chiao, 2022. "Carbon emissions trading policy, carbon finance, and carbon emissions reduction: evidence from a quasi-natural experiment in China," Economic Change and Restructuring, Springer, vol. 55(3), pages 1445-1480, August.
    12. Brito-Pereira, Paulo & Rodilla, Pablo & Mastropietro, Paolo & Batlle, Carlos, 2022. "Self-fulfilling or self-destroying prophecy? The relevance of de-rating factors in modern capacity mechanisms," Applied Energy, Elsevier, vol. 314(C).
    13. Wittmayer, Julia M. & Avelino, Flor & Pel, Bonno & Campos, Inês, 2021. "Contributing to sustainable and just energy systems? The mainstreaming of renewable energy prosumerism within and across institutional logics," Energy Policy, Elsevier, vol. 149(C).
    14. Forrester, Sydney P. & Reames, Tony G., 2020. "Understanding the residential energy efficiency financing coverage gap and market potential," Applied Energy, Elsevier, vol. 260(C).
    15. Loewen, Bradley, 2022. "Revitalizing varieties of capitalism for sustainability transitions research: Review, critique and way forward," Renewable and Sustainable Energy Reviews, Elsevier, vol. 162(C).
    16. Muhammad Akram Shahzad & Madiha Riaz, 2022. "Assessing the Impact of Green Finance on Environmental Sustainability," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(3), pages 196-220, September.
    17. Abidah B. Setyowati, 2020. "Mitigating Energy Poverty: Mobilizing Climate Finance to Manage the Energy Trilemma in Indonesia," Sustainability, MDPI, vol. 12(4), pages 1-18, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. International Monetary Fund, 2019. "Australia: Financial Sector Assessment Program-Technical Note-Stress Testing the Banking Sector and Systemic Risk Analysis," IMF Staff Country Reports 2019/051, International Monetary Fund.
    2. International Monetary Fund, 2017. "Luxembourg: Financial Sector Assessment Program: Technical Note-Risk Analysis," IMF Staff Country Reports 2017/261, International Monetary Fund.
    3. Fiedor, Paweł & Killeen, Neill, 2021. "Securitisation special purpose entities, bank sponsors and derivatives," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 75(C).
    4. Dillman, K.J. & Heinonen, J., 2022. "A ‘just’ hydrogen economy: A normative energy justice assessment of the hydrogen economy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 167(C).
    5. Alessandro Bitetto & Paola Cerchiello & Charilaos Mertzanis, 2021. "A data-driven approach to measuring financial soundness throughout the world," DEM Working Papers Series 199, University of Pavia, Department of Economics and Management.
    6. Giebel, Marek & Kraft, Kornelius, 2020. "Bank credit supply and firm innovation behavior in the financial crisis," Journal of Banking & Finance, Elsevier, vol. 121(C).
    7. Jayapalan, C. & Ganesh, L.S., 2019. "Environmentalists and their conflicts with Energy Justice – Concept of “Power-Environ” in the Athirappilly HEPP in Kerala," Energy Policy, Elsevier, vol. 129(C), pages 215-229.
    8. Egli, Florian, 2020. "Renewable energy investment risk: An investigation of changes over time and the underlying drivers," Energy Policy, Elsevier, vol. 140(C).
    9. Elie, Luc & Granier, Caroline & Rigot, Sandra, 2021. "The different types of renewable energy finance: A Bibliometric analysis," Energy Economics, Elsevier, vol. 93(C).
    10. Bauwens, Thomas, 2019. "Analyzing the determinants of the size of investments by community renewable energy members: Findings and policy implications from Flanders," Energy Policy, Elsevier, vol. 129(C), pages 841-852.
    11. Shahriyar Nasirov & Carlos Silva & Claudio A. Agostini, 2015. "Investors’ Perspectives on Barriers to the Deployment of Renewable Energy Sources in Chile," Energies, MDPI, vol. 8(5), pages 1-21, April.
    12. Feenstra, Mariëlle & Özerol, Gül, 2021. "Energy justice as a search light for gender-energy nexus: Towards a conceptual framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 138(C).
    13. Sarah Hafner & Olivia James & Aled Jones, 2019. "A Scoping Review of Barriers to Investment in Climate Change Solutions," Sustainability, MDPI, vol. 11(11), pages 1-19, June.
    14. Angelopoulos, Dimitrios & Doukas, Haris & Psarras, John & Stamtsis, Giorgos, 2017. "Risk-based analysis and policy implications for renewable energy investments in Greece," Energy Policy, Elsevier, vol. 105(C), pages 512-523.
    15. Polzin, Friedemann & Egli, Florian & Steffen, Bjarne & Schmidt, Tobias S., 2019. "How do policies mobilize private finance for renewable energy?—A systematic review with an investor perspective," Applied Energy, Elsevier, vol. 236(C), pages 1249-1268.
    16. Grashof, Katherina, 2019. "Are auctions likely to deter community wind projects? And would this be problematic?," Energy Policy, Elsevier, vol. 125(C), pages 20-32.
    17. Steffen, Bjarne, 2018. "The importance of project finance for renewable energy projects," Energy Economics, Elsevier, vol. 69(C), pages 280-294.
    18. Nadia Ameli & Paul Drummond & Alexander Bisaro & Michael Grubb & Hugues Chenet, 2020. "Climate finance and disclosure for institutional investors: why transparency is not enough," Climatic Change, Springer, vol. 160(4), pages 565-589, June.
    19. Menyeh, Bridget Okyerebea, 2021. "Financing electricity access in Africa: A choice experiment study of household investor preferences for renewable energy investments in Ghana," Renewable and Sustainable Energy Reviews, Elsevier, vol. 146(C).
    20. David, Martin, 2018. "The role of organized publics in articulating the exnovation of fossil-fuel technologies for intra- and intergenerational energy justice in energy transitions," Applied Energy, Elsevier, vol. 228(C), pages 339-350.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:appene:v:222:y:2018:i:c:p:772-780. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/wps/find/journaldescription.cws_home/405891/description#description .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.