12 WHY NORWAY AS A GREEN BATTERY …
285
Transforming the energy system from fossil-based to primarily renewable energy-based—which the green battery idea requires—constitutes
an enormous structural economic change. Structural change, however,
creates winners and losers and is typically fought by the losers, which have
a vested interest in the perpetuation of the system. New and rising industries, like wind power, have not had the time to garner the support of
powerful interests, not yet organized to form strong special interest organizations, and not yet accumulated powerful political allies. In contrast,
incumbents have had ample time to organize, have access to political
networks, and have succeeded in forming beneficial institutional structures. Politically, economically, and institutionally, the old established
vested interests have all the advantages.
Furthermore, decisions with large redistributive consequences are
politically costly. Politicians rarely make such decisions without major
political support across party lines or in the populace. Thus, the safe bet
for a politician is to back established interests, preserve the institutional
structure, eschew major structural change, and in essence shelter the most
important vested interests.
There are numerous vested interests in any political economy, but
energy interests are among the most powerful. Once locked in, they
are not easily replaced. Today’s oil, coal, and energy companies are the
biggest industrial giants on the planet, part of what Unruh (2000) labels
a techno-institutional complex that perpetuates a fossil fuel-based infrastructure, exacerbated by government subsidies and institutions, resulting
in “carbon lock-in”.
Theoretically, the above logic rests on Joseph Schumpeter (1942,
1983) and Mancur Olson (1982). It blends Schumpeter’s evolutionary
economics and “waves of creative destruction” (a renewable energy transition being one such potential wave) with Olson’s focus on vested
interests. Schumpeterian economics emphasizes structural change. Industries rise because they provide society with new and more efficient ways
of doing things, and they fall because what was once technologically
revolutionary becomes commonplace and obsolescent as society invents
other technologies by which to solve its problems. Hence, there is a
steady rise and fall of industries, linked to technological progress: waves
of innovation, waves of stagnation, and “waves of creative destruction”.
From Olson (1982) flows the observation that rigidities gradually
silt up in the economy. Without major shake-ups, economies become
ever more inefficient. This is because vested interests wrest power away
285
Transforming the energy system from fossil-based to primarily renewable energy-based—which the green battery idea requires—constitutes
an enormous structural economic change. Structural change, however,
creates winners and losers and is typically fought by the losers, which have
a vested interest in the perpetuation of the system. New and rising industries, like wind power, have not had the time to garner the support of
powerful interests, not yet organized to form strong special interest organizations, and not yet accumulated powerful political allies. In contrast,
incumbents have had ample time to organize, have access to political
networks, and have succeeded in forming beneficial institutional structures. Politically, economically, and institutionally, the old established
vested interests have all the advantages.
Furthermore, decisions with large redistributive consequences are
politically costly. Politicians rarely make such decisions without major
political support across party lines or in the populace. Thus, the safe bet
for a politician is to back established interests, preserve the institutional
structure, eschew major structural change, and in essence shelter the most
important vested interests.
There are numerous vested interests in any political economy, but
energy interests are among the most powerful. Once locked in, they
are not easily replaced. Today’s oil, coal, and energy companies are the
biggest industrial giants on the planet, part of what Unruh (2000) labels
a techno-institutional complex that perpetuates a fossil fuel-based infrastructure, exacerbated by government subsidies and institutions, resulting
in “carbon lock-in”.
Theoretically, the above logic rests on Joseph Schumpeter (1942,
1983) and Mancur Olson (1982). It blends Schumpeter’s evolutionary
economics and “waves of creative destruction” (a renewable energy transition being one such potential wave) with Olson’s focus on vested
interests. Schumpeterian economics emphasizes structural change. Industries rise because they provide society with new and more efficient ways
of doing things, and they fall because what was once technologically
revolutionary becomes commonplace and obsolescent as society invents
other technologies by which to solve its problems. Hence, there is a
steady rise and fall of industries, linked to technological progress: waves
of innovation, waves of stagnation, and “waves of creative destruction”.
From Olson (1982) flows the observation that rigidities gradually
silt up in the economy. Without major shake-ups, economies become
ever more inefficient. This is because vested interests wrest power away