Why Countries Move through the Energy Transition as They Develop Economically

A model of the energy transition.
A model of the energy transition. | Source

As a country's economy develops, so too does its capacity to invest in sources with a higher initial cost, sources which require better infrastructure, and research into alternative energy sources.

In the initial stages of development, a country will often have large areas of undeveloped, greenfield land, i.e. large forests, along with a dominant agricultural industry. Hence, biomass, namely burning wood and agricultural waste, are the most readily available and affordable.

Oil quickly overtakes biomass, as it is more suitable for industry, in particular transport, which facilitates further development.

The use of coal, and then gas, emerges as the developing country focuses on rapid growth rather than increasing energy security; the government may prioritise growth over environmental consequences, hence the dominance of coal – a cheap and dirty fossil fuel. This is comparable to China in the past 40 years.

Once industrialised, the government will give more concern to improving its energy security, by reducing reliance on imported fossil fuels, and increasing the use of domestic sources, which invariably include renewables, such as wind power; renewables begin to phase out the dirtiest fossil fuels, but some reliance on gas remains, as it has a good public perception, is cheap, and has a relatively minimal effect on the environment.

Furthermore, an industrialised country will have a well-educated population, which will exert pressure on the government to promote renewable energy sources, as is the case in Germany, which recently generated 100% of its energy from non-fossil fuel sources for a short period of time.

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