Climate Change and the Business (History) of Energy

Abstract

This chapter reviews the business history of the energy industry in relation to climate change. Two themes take centre stage. The first centres on the ways in which the energy industry has responded to climate change, in particular to its scientific basis and the translation of climate science into policy. The second theme centres on the transition to a decarbonised energy system, addressing the question of how policy and business responses to climate change have shaped the ways in which energy is produced and consumed and how they have impacted the business of energy. Both themes have so far received modest, though growing, attention in the business historical literature. The chapter sketches the global context, traces the outlines of the development of the energy industry, and discusses the state of the art of the historiography. It concludes that the energy industry has been slow to adapt to the reality of climate change. First, although the energy crises of the 1970s fostered a window of opportunity for renewable energy technologies to grow, the lack of environmental urgency ultimately choked off a potential breakthrough, rendering most of these technologies uncommercial by the time the world came to recognise that radical decarbonisation was required in the early 1990s. Second, it took the best part of the 1980s and 1990s to garner sufficient political and societal consensus about the causes and consequences of climate change. And even if consensus was by and large achieved by the 2000s, this did not extend to the ways in which climate change was to be avoided and mitigated, allowing the fossil energy industry to drag its feet and lobby for policy instruments that exerted limited direct pressure on GHG emissions from fossil fuels and left room for their proliferation. Many of the world’s major oil and gas companies remained ambivalent about climate change and decarbonisation well into the 2020s. Nonetheless, starting in the 1990s and accelerating in the 2000s, energy transition policies provided the protective niches that allowed the commercialisation of clean energy technologies, to the point where, by the late 2010s, wind and solar energy became cost-competitive with fossil energy. Business historians, meanwhile, are beginning to dig into this rather general narrative in search of the hitherto ignored business histories of non-fossil energy and the role of business in international governance regimes.