The development of energy policy and the adoption of renewable electricity in Germany and Australia – A political economy perspective

The last decade has witnessed the substantial adoption of renewable energy in several advanced capitalist economies. This adoption has not been uniform. Germany, despite its geographically limited energy resources from solar and wind, generates more than one-third of its electricity from renewable energy sources, while Australian electricity generation remains dominated by fossil fuels, despite its huge renewable energy resources. The objective of this thesis is to examine why some capitalist economies have implemented policies leading to a greater use of renewable energy and others have not. In particular, Germany and Australia are compared. Two complementary analytical approaches – the Varieties of Capitalism micro approach and Régulation Theory’s macro approach – are applied to identify the social relationships, political ideologies, and institutional architecture facilitating or hindering the adoption of renewable energy. This thesis finds that Germany’s adoption of renewable energy policy has been favoured by social cohesion supported by social security and labour welfare, political activism focused on energy and environmental issues, and consistent state intervention to balance socio-economic inequities. In addition, financial institutions supporting new technology uptake, innovation as the guiding principle for employment, education and firm-state relations, and international competitiveness in energy security, have driven the adoption of renewable energy policy. In comparison, Australia has a critical barrier to the adoption of renewable energy policy in the strong influence of neoliberal ideological principles, which are selectively implemented, and thus rising individualism, high living costs and social inequality. Other barriers are: the prioritisation of economic gains over social welfare and the divorce of economic policy objectives from social and environmental policies. Finally, business elites, including the fossil fuel industry, have shaped investment decisions and directed capital flows towards sectors with short-term high-revenue gains. These institutional arrangements define Australia’s position within the global economy and create substantial barriers for renewable energy policy adoption. The comparative analysis of this thesis shows that harmonisation between political, economic and social players, and the integration of renewable energy policy at multiple governance levels, is needed to generate an institutional and cultural environment supportive of widespread renewable electricity adoption