A shift towards a world with drastically lower carbon emissions appears to be in the cards. The UNFCC noted that global commitments to reach net-zero emissions from regions, cities, corporations, and countries has doubled since September 2019, and that was before China, Japan, and South Korea all pledged to reach net-zero emissions by 2050 or 2060.
This transition towards low carbon emission energy sources in global markets will utterly transform resource economies long-term. Canadian governments at all levels will not only need to think about diversification, but to act and invest ambitiously if they want to maintain current levels of economic prosperity in a changing world. However, they must undertake the difficult task of deciding which ideas are worth supporting in a world with a very uncertain future.
For governments facing these decisions, a useful frame for thinking about change is through a “transition pathways lens”. As one of several lenses that the Energy Futures Policy Collaborative will be adopting, this blog provides a high-level of overview of what transition pathways are, how they can be considered, and how policymakers can think about selecting the “right” pathways to support the achievement of their outcomes.
Transition pathways are a concept used in academic and policy work to think about change through a systems lens. Pathways are, at their core, a framework for thinking about how change happens in economies. Transition pathways outline one or more “paths” that an economy, industry, or region can take to get from ‘Point A’ (the current states of things) to ‘Point B’ (a desired future state). The evolution of personal transportation from horse and cart to the internal combustion engine automobile is a historic example of a successful transition pathway. Battery-electric and hydrogen-powered vehicles have both emerged as potential pathways in the 21st century, although they have not yet displaced incumbents (and may not ultimately end up doing so).
Pathways help outline the timing, scope, and scale of change necessary throughout the whole landscape for a region, industry, or economy to get from Point A to Point B. Importantly, this is not the same as a strategy: strategies are plans that outline how to get from A to B. Pathways help outline what needs to be considered, and what will matter, when assessing whether a given idea or concept is capable of getting us from A to B.
Each pathway is made up of a combination of ideas and processes that shape the world we operate in. In the real world, change is influenced by a broad array of factors: technological process, social beliefs, economic ideology, mainstream cultural views, investment patterns, infrastructure networks, and more. Transition pathways are a useful framework for decision-makers because they can help outline how each of these ideas might influence the way change happens at a system-level, identifying what barriers or factors need to be considered or addressed when opting to pursue a particular goal.
Pathways are used to understand how interactions between different ideas create the landscape we operate in. This is important because the trajectory or direction of a given pathway will ultimately be shaped not by one idea, but by how that idea interacts with all other processes and beliefs held throughout the world. The difference between a good idea and a useful one is whether it works in practice; pathways help outline what is actually needed to help a particular idea achieve a desired outcome.
Three concepts matter in discussions of pathways: the incumbent, the niche, and the landscape. “Incumbents” describe the ideas, groups, and processes that make up the status quo. They form the foundation of the world we live in today. To continue personal transportation as an example, incumbents would include oil companies who refine gasoline, networks of retail gas stations, and popular opinions about high-performance sports cars. They are the mainstream ideas, processes and beliefs that shape how we interact with technologies and each other.
“Niches” describe innovative concepts and ideas whose success depends on upending or disrupting the status quo. In the case of personal transport, examples include electric vehicle manufacturers like Tesla and Rivian, global pledges for net-zero emissions, and proponents of electrified transportation. These technologies and ideas are currently considered interesting and high-potential but can hardly claim to be the dominant technology in practice today. Yet they have the potential to eventually become incumbent ideas, depending on what kind of change the world experiences in the coming years.
The “landscape” is a frame for thinking about how every set of actors, processes, groups and ideas ultimately makes the world the way it is. The landscape, or the world we live in, is shaped by interactions between incumbents and niches, since each aims to influence change in their favour. The trajectory of a pathway is defined by how these interactions take place, and that contest of ideas is what shapes the landscape we operate in globally.
What is a “good” pathway?
Identifying which pathways policymakers want to support depends on understanding what kind of future people want to live in. A “good” pathway is one that is capable of bringing about that future and can do so even if the world shifts around it. However, there are still some foundational characteristics that any pathway must possess to be seen as legitimate.
At a minimum, good pathways must be:
- Credible: Pathways must be based on the realities we live in. Effective pathways have to largely rely on ideas that are technically possible and used in practice, even if only at small-scale.
- Compelling: Pathways must be attractive to investors and stakeholders. This means that designing pathways must keep in mind what investors are seeking in projects, and what the public will support, and incorporate those views into their approaches.
- Capable: Pathways must possess the technical potential to actually achieve their objectives. This is most obvious in discussions of emissions mitigation. Any pathway compatible with a net-zero future must be technically capable of reaching a net-zero climate target, or it will not be able to achieve set objectives in practice.
- Flexible: Pathways need to be able to change as circumstance does. The world moves quickly, and any pathway developed needs to be robust and flexible enough that it can swiftly adjust to new information without incurring huge losses or needing to be abandoned.
Pathways are a useful frame for thinking about how change happens. As new and established ideas compete for market share and public attention in the decades to come, Canadian policymakers will need to ensure they are supporting the ideas that drive growth and regional prosperity. For the Energy Futures Policy Collaborative, thinking about how change happens is a useful way to ensure grounded, realistic decisions are made about what is required to build the future we want to live in.
John McNally is a Senior Research Associate and the Manager of the Clean Growth team at the Smart Prosperity Institute. He is a member of the working group for the Energy Futures Policy Collaborative.