Wind turbines are seen in this photo taken on April 19, 2023 in Rotterdam, Netherlands.

Publication Type

Energy transition: The race between technology and political backlash

Pierre-Olivier Gourinchas (International Monetary Fund), Gregor Schwerhoff (International Monetary Fund) and Antonio Spilimbergo (International Monetary Fund)

Working Papers 24-4
Photo Credit: REUTERS/Piroschka van de Wouw

Body

The green transition faces old and new challenges. Old challenges include insufficient domestic action and challenging international coordination. New challenges include the quest for energy security and the rising threat of geoeconomic fragmentation, the political backlash against climate policies, and a slowing growth prospect. At the same time, technological progress has been faster than expected. The success of the green transition depends on the outcome of the race between technological progress and rising inward-looking policies. Energy security and green transition are mutually reinforcing provided clear policy directions are given. The challenge is to pursue collaboration to exploit technological progress in a world at risk of fragmentation.

Data Disclosure:

The data underlying this analysis can be downloaded here [zip].

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