Of Markets and Subsidies: Counter-intuitive Trends for Clean Energy Policy in the European Union and the United States

The United States (US) is frequently portrayed as a nation with a deep distrust of big government and a strong commitment to markets and competition. In contrast, the prevailing image of the European Union (EU) is that of a highly bureaucratized polity favouring interventionist economic governance over free market capitalism. In the context of clean energy, however, these roles appear to be somewhat reversed. A top-level survey of the US clean energy policy landscape reveals a surprisingly pervasive reliance on government subsidies with few, if any, competitive elements. EU clean energy policy, meanwhile, reflects an unexpected commitment to market-based instruments and competition. This article suggests that these counter-intuitive policy trends can be explained by critical differences in the black-letter law of both jurisdictions and its enforcement in the courts, among other factors. Unlike their American counterparts, EU judges prioritize the timely transition to a low-carbon energy economy over unrestricted competition among Member States. As the EU pushes for greater intrastate competition in clean energy policy, the US focuses instead on defending the Founding Fathers’ ideal of unfettered interstate competition.

A Review of Clean Electricity Policies—From Countries to Utilities

Due to the heavy stress on environmental deterioration and the excessive consumption of fossil resources, the transition of global energy from fossil fuel energy to clean energy has significantly accelerated in recent years. The power industry and policymakers in almost all countries are focusing on clean energy development. Thanks to progressive clean energy policies, significant progress in clean energy integration and greenhouse gas reduction has been achieved around the world. However, due to the differences in economic structures, clean energy distributions, and development models, clean energy policy scope, focus, and coverage vary between different countries, states, and utilities. This paper aims at providing a policy review for readers to easily obtain clean energy policy information on various clean energies in the U.S. and some other countries. Firstly, this paper reviews and compares some countries’ clean energy policies on electricity. Then, taking the U.S. as an example, this paper introduces the clean energy policies of some representative states and utilities in the U.S in perspectives of renewable energies, electric vehicles, and energy storage.

Policy Feedback Takes Hold

Chapter 4 examines one of the earliest renewable energy laws in the United States: Texas’s renewable portfolio standard, enacted under then-governor George W. Bush in 1999. This chapter provides the early history of clean energy leadership in Texas, when wind energy grew rapidly. Relying on original archival research and primary interviews, it explains why Texas acted on clean energy before California and other more progressive states. It shows how savvy advocates used public opinion to drive policy change during windows of opportunity. More broadly, this case reveals a classic positive feedback dynamic: a growing wind energy sector increased its influence over the legislature and successfully expanded clean energy policy. Here, advocates relied on the fog of enactment to get a clean energy target and an ambitious infrastructure spending bill passed in the legislature. They also worked through the public to convince legislators that clean energy leadership was important for Texans.