Varieties of coal-fired power phase-out across Europe

Abstract

Meeting climate goals is a particular challenge for countries that combine extensive use of coal as a fuel for power generation with a significant history of coal mining. We argue that these countries are prone to institutional carbon lock-in processes that significantly affect the phase-out of the use of coal. We use the analytical framework of Varieties of Capitalism to compare degrees of carbon lock-in in Coordinated Market Economies (CMEs) with Liberal Market Economies (LMEs). In CMEs “strategic interaction”, “employment protection” and “government ownership” translate into protection of uncompetitive domestic coal activities and assets through (cross) subsidies and veto play. In LMEs the use of coal will be more dependent upon its market price in the international energy market. Through a qualitative comparison of the development of coal-mining and coal-fired electricity generation in three CMEs (Germany, Spain, Poland) and one LME (the UK) over the period between 1990 and 2017 we show that the UK's liberal market economy facilitated a relatively swift phasing out of coal mining and the use of coal, compared to a much more reluctant transition in the other three countries.