The World Bank’s report on the energy transition on low- and middle-income countries (Scaling Up to Phase Down) makes for pretty interesting reading. The gist of it, and prima facie I have no reason to think their data or analysis is wrong, is:
- 1. Moving to renewable power generation in low- and middle-income countries is doable.
- 2. It takes a lot more money and institutional capabilities than they have access to.
- 3. Until they do have access to them, short-term dynamics makes things worse.
- 4. They should, therefore, get more money and institutional capabilities.
- 5. (High-income countries might pitch in with some cheap financing, but don’t count on it being more than “catalyst”-sized.)
Point (1) is one of the best and most surprising developments of the last 10-15 years; renewable power generation technology has moved much further and faster than we feared it could at the beginning of the century. Points (2) and (3) seem empirically unarguable (although Terraform Industries would probably have a counterpoint to the assumptions). Point (5) is less impossible than politically unlikely, but who knows over the long term (on the other hand, depending on which way the political winds move, it could get much worse).
Point (4) is, I think, the crux of the matter. Most problems become much easier if you get better institutional capabilities (including money problems). And we do know that it’s possible to improve institutional capabilities. But I don’t know that we know how to do it on purpose. A lot of my professional experience has involved unwillingly and unhappily grappling with the non-technical difficulties of improving institutional capabilities in private organizations where many of the difficult cultural inertia goal alignment issues of, e.g., governments are much simpler, yet strong enough to derail even well-meaning projects. It’s much, much harder for states. It’s not at all unknown to happen, but it doesn’t look like states can, you know, just choose to and reliably do it, even assuming sufficiently large interest coalitions rooting for it (and one can ask whether the long-term low-capability status of many low- and middle-income countries doesn’t really suggest very much the opposite as the status quo).
I don’t have an answer. I don’t think the World Bank has an answer, and by and large I think they are as likely as anybody to know it, and would very much want to. There’s also the fact that institutional capability does seem to show some strong cross-country learning effects: even relatively weak states today have much stronger capabilities than relatively strong states in the past, maybe due in some degree to advances in technology (in the broadest sense) make it cheaper. Information technology making institutional capabilities cheaper and less politically demanding, coupled with engineering advances lowering the specific governance prerequisites for large-enough-scale renewable energy, might help put a ceiling on the damage that’s already locked-in.
Might.