Barriers to just energy transition: Institutional and infrastructure challenges in developing countries

Abstract

• Strong institutions and infrastructure are vital for energy transitions. • Identifies barriers like reliance on coal and weak governance structures. • Empirical analysis shows positive impacts of robust institutions on transitions. • Advocates for integrated strategies combining policy and infrastructure improvements. • Emphasizes alignment with SDGs for equitable energy access and social justice. This paper focuses on the critical roles of institutions and infrastructure in facilitating or obstructing the energy transition in developing countries. It highlights how inadequate regulatory environments, characterized by weak governance and insufficient policy enforcement, hinder the adoption of renewable technologies. The study first establishes empirically that institutions and infrastructure have a strong positive impact on the performance of energy transition systems. For this purpose, it utilizes a unique proprietary dataset developed by the World Economic Forum (WEF). The paper identifies various barriers to just energy transitions, including economic dependence on coal, lack of infrastructure, investment risks, and insufficient institutional capacity. It argues that achieving a successful energy transition requires a multifaceted approach that strengthens institutional capacities, enhances regulatory frameworks, and invests in resilient energy infrastructure. The findings underscore the urgent need for concerted efforts to reorient governance structures and regulatory environments toward sustainable energy solutions. By fostering an environment conducive to innovation and collaboration, developing countries can navigate the complexities of energy transition, ensuring a just and equitable shift toward renewable energy that benefits all segments of society and aligns with global climate goals.

Topics & Concepts