Trials and tribulations of market responses to climate change: Insight through the transformation of the Australian electricity market

Abstract

We analyse the energy transition from coal to renewable. Our research contributes to the literature on transitions and grand challenges. Mitigating the effects of dangerous human-induced climate change requires Australia to adopt a ‘carbon budget’ of no more than 10 Gt between 2015 and 2050. To achieve this, the Australian electricity sector must reduce greenhouse gas emissions to at least net zero emissions by 2050. Australia’s strategic response to climate change will have a significant influence on greenhouse gas emissions across Asia and the Pacific. The transition to renewables has proved difficult. The Liddell case study, involving closure of an ageing coal-fired power station, shows how the transition was impeded by institutional decisions. While firm-level actors recognised opportunities, regulators resisted the transition. Our research illustrates that transitions for grand challenges may require a relational stakeholder review, beyond the concept of short-term win–wins. JEL Classification: L02, D02, Q05

An integrated theory of the firm approach to environmental, social and governance performance

“…In practice, tensions arising from economic activity are not easy to resolve (Holdaway, 2019). As Dodd and Nelson (2019) note, even when businesses aim to make decisions that are economically sound and environmentally responsible, broader stakeholder interests may intercede as a result of the interdependence of social and economic values. That is, stakeholder theory’s appeal to social norms as guidance for firm ESG activity may not be sufficient.…”

Grand challenges in management research: Attributes, achievements, and advancement

“…A lack of clear lines of responsibility complicated legal responsibility for organizations operating in multiple jurisdictions, leading to an extremely expensive yet infective process of refugee processing. Dodd and Nelson (2019) focus on a community GC and analyze the energy transition challenge from coal to renewables. It is evident that mitigating the effects of dangerous human-induced climate change will require all countries, including Australia, to achieve significant carbon reductions.…”

“…Dodd and Nelson (2019) focus on a community GC and analyze the energy transition challenge from coal to renewables. It is evident that mitigating the effects of dangerous human-induced climate change will require all countries, including Australia, to achieve significant carbon reductions.…”

Electricity markets in flux: The importance of a just transition

“…To date, there has been little to no transition planning for affected workers and communities in Australia. While there has been an attempt for planned closure and transition, for example the case of AGL giving formal notification to close the Liddel power station in 2022, there has been a mismatch with business strategy and political strategy (see Dodd and Nelson, 2019). Further, research conducted by Beyond Zero Emission (BZE) (2019) in collaboration with unions, social sector, traditional owners and local community members of coal town in Collie Western Australia, has found that with foresight, co-design, planning and the right policy settings, there is opportunity to create 1,750 jobs, more than offsetting the 1,250 positions in the Collie coal industry.…”