Handbook on Energy and Climate Change
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Handbook on Energy and Climate Change

Edited by Roger Fouquet

This timely Handbook reviews many key issues in the economics of energy and climate change, raising new questions and offering solutions that might help to minimize the threat of energy-induced climate change.
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Chapter 27: Decentralization of governance in the low-carbon transition

Nick Eyre


Addressing climate change is now widely accepted as a key global challenge for the twenty-first century. It is largely an energy challenge, as the global energy system is the largest emitter of carbon dioxide (CO2) and therefore a low-carbon economy implies radical changes to the energy system. At the same time energy decision makers face challenges with respect to energy security and, in the developing world, providing much wider access to modern forms of energy. In delivering on these challenges, very large investments in energy technology will be required and energy cost remains critical, for both industrial competitiveness and social goals. So it is tempting to see the issue as a technical and economic challenge. However, the scale of change is so significant, and the role of energy in modern life so central, that it is a social and political challenge as well. If the system is to change, its governance may also need to change. This chapter argues that the highly centralized systems of energy governance that have developed over the last century are unlikely to prove fit for purpose in meeting the challenges ahead and that more inclusive and decentralized governance will be required, especially to engage ‘the demand side’ in the process of change.

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