Harald Heinrichs · Pim Martens Gerd Michelsen · Arnim Wiek Editors

6 Policy and Governance for Transitions to Sustainable 
Energy Systems
Our overview shows that making the transition to sustainable energy systems is not 
so much an energy resource or technology problem. But it requires investments in 
energy efficiency, renewable energy technologies, infrastructure, etc. Much, or even
all, of these investments can be recouped through lower fuel and other operating 
costs. Thus, the net effect on total economic costs for energy services can be small.
The main challenge for sustainable energy systems is to get political support and 
design policies and policy instruments (e.g. regulations, economic incentives and 
market designs) that stimulate investors, producers, planners and consumers to 
Local Green Energy and Climate Initiatives
Visions and policies for sustainable energy systems are not limited to national 
policy-making levels. Since the adoption of the local Agenda 21 at the UN 
Rio conference 1992, many local initiatives have emerged, and respective 
networks such as ICLEI (
www.iclei.org
) and C40 (
www.c40cities.org/
) com-
prise thousands of municipalities worldwide including many of the largest 
megacities (Bulkeley 
2010
).
• Please discuss your ideas on how our future energy systems could or 
should look like.
19 Sustainable Energy Systems

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make the right choices. Important barriers to this include goal conflicts (e.g. when 
an energy or climate policy is perceived to be in conflict with other societal goals 
such as jobs and growth) and conflicts of vested interest due to distributional effects. 
Most policy-induced changes result, more or less, in winners and losers. In our case,
fossil fuel producers, car manufacturers and petrochemical companies are examples 
of likely losers unless they can reinvent themselves and their business. Potential 
winners are future companies engaged in energy efficiency and renewable energy. 
Some of these do not exist yet and therefore have little influence in ongoing power 
struggles and policy processes.
Thus, the challenge is mainly how a transition can be governed through inte-
grated policy strategies that facilitate the shift to new practices, end-use patterns, 
technologies, infrastructures and primary energy resources. This presents chal-
lenges in all areas, but future-oriented energy studies indicate, in particular, four 
potential governance challenges (aside from those associated with CCS and nuclear
energy that we do not expand on here). These include handling the increased pres-
sure on bio-resources and land use, sustainable mobility and transport, electricity 
system infrastructure development and the decarbonisation of industry.
Biomass is and will remain an important primary energy resource, but energy 
and climate policies that are designed to make fossil fuels more expensive will also 
generate a higher willingness to pay for bioenergy. As a result the pressure on these 
resources increases, and it comes into conflicts with, for example, biodiversity and 
food production. It can also lead to even greater CO
2
emissions than from fossil 
fuels if forests are cleared and organic soils are cultivated with high soil carbon 
emissions as a result. The policy response to this should not be a ban on bioenergy, 
but it requires good governance and policy that regulates land use and ensures that 
bioenergy and biofuels are produced sustainably.
Sustainable mobility requires broad policy strategies where one part is the devel-
opment of new vehicle and fuel technologies based on biofuels, electricity, hydro-
gen or even hydrocarbons based on electricity. An important challenge here is 
handling uncertainty concerning how successful technology development will be. It 
also requires a range of strategies to influence transport demand and the choices of 
transport modes (where public transport, bicycling and walking are preferred). See 
Chap. ## on Sustainable Transport.
Scenarios consistently show that electricity will be an increasingly important 
energy carrier in the future. Wind and solar energy can be readily converted into 
electricity. Electricity does not contain carbon atoms, and it is a versatile and effi-
cient energy carrier. Electrification is also a key option for reducing fossil fuel use 
in transport and industry. However, investments in grid infrastructure and redesign
of markets are needed in order to handle the variable output of renewable sources 
through, for example, more flexible demand, transmission across longer distances, 
energy storage technologies and greater integration with heating and cooling 
systems.
Finally, several basic material industries, including iron and steel and cement, 
use large amounts of fossil fuels in their processes. Such basic materials are impor-
tant for making the transition in other sectors. In cement, roughly half of the CO
2
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emissions result from converting calcium carbonate (CaCO
3
) into calcium oxide 
(CaO), so using non-fossil fuels will only partly reduce the emissions. Although
there are technical options to make industry carbon neutral, it can be quite costly. 
Higher costs will be difficult to pass through to consumers if competitors in other
parts of the world do not meet the same environmental restrictions. Thus, part of the 
challenge is to facilitate technology shifts while at the same time avoiding that pro-
duction and emissions move elsewhere.