Energy firms' responses to institutional ambiguity and complexity in long energy transitions:The case of the UK and China

Tarim, Emre and Finke, Tobias and Liu, Lingxuan (2021) Energy firms' responses to institutional ambiguity and complexity in long energy transitions:The case of the UK and China. British Journal of Management, 32 (3). pp. 648-692. ISSN 1045-3172

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Abstract

We compare and contrast the UK and China as maximum variation cases for understanding long energy transitions from the state and the firm perspectives. We present case histories and corpus-based computer-assisted textual analyses on the long energy transitions in both countries. With these, we explore and explain how and why energy supply firms respond the way they do to the institutional ambiguities and complexities that characterize the long energy transitions in each case. Our findings demonstrate that a centrally coordinated and imposed approach by the state can generate institutional clarity in long energy transition, which is quickly seized on by firms striving to preserve and increase their resources and influence. Such clarity and transition processes lose momentum owing to the perennial trilemma of energy affordability, security and sustainability. Market-based mechanisms to trigger and sustain long energy transitions, complemented with focused and continuous state interventions (e.g., incentives, taxation) provide a more effective and accountable institutional framework for the state and energy firms to deal with the energy trilemma. Irrespective of the logic of the type of economy that manifests the backdrop for any long energy transition process, institutional ambiguity and complexity never disappear completely, owing to both the energy trilemma and the institutional multiplicities.