Systemic challenges and new policy directions in the energy transition

This chapter provides an historical overview of the development of national and international energy markets, and how political goals shifted from energy security to an alignment of energy and climate policies. The systemic nature of the transition challenge is addressed. The chapter discusses how different institutional configurations lead to nationally distinct paths to reach carbon-neutrality, focusing on the cases of Germany, France and the United Kingdom, explaining how national institutional diversity shaped policymaking in the European Union. It is argued that transition effects led to a destabilization of national institutional systems and this uncertainty is amplified by misalignments between national institutions and intergovernmental organizations. High levels of uncertainty faced by MNEs due to the energy transition may explain insufficient levels of FDI in transition-related activities. Finally, the implications for the global transition are assessed, focusing on policy directions vis-à-vis MNE activity in the energy transition of emerging and developing countries.