Choosing Who to Foot the Bill: Distributional Politics of Green Energy Transition in Germany and the UK

Green energy transition is inherently a distributional phenomenon. The government can shape how costs and benefits of this transition are allocated among society and the market in a variety of ways. I refer to these interventions as distributive strategies, which include economization, redistribution, and compensation. Variations in these strategies can have significant distributional implications. For instance, in Germany, the transition disproportionately benefitted renewable energy producers in comparison to the UK due to insufficient economization. Additionally, excessive redistribution in Germany led to an imbalance in burden-sharing, favoring industry at the expense of other renewable energy consumers like households. Finally, Germany’s comprehensive compensation schemes spread the costs of transition more broadly than in the UK. Why are the costs and benefits distributed disproportionately in one country but not in another? What compromises its fairness? And what determines the use of strategies that dictate distributional outcomes? This research seeks to answer these questions.