Structural Change, Vested Interests, and Scandinavian Energy Policy-Making: Why Wind Power Struggles in Norway and not in Denmark

Abstract

The article takes a theoretically informed look at why policies favoring renewables (here wind power) are implemented in some countries rather than others, with empirical data from Norway and Denmark. The theory combines Joseph Schumpeter and Mancur Olson, emphasizing structural economic change as all-important to long-term economic growth, but that vested interests may easily hamper the growth of new industries, like renewables. Typically, vested interests tied in with the old industrial paradigm seek to preserve their advantage, securing for themselves favorable regulations and institutions. These regulations and institutions do however not necessarily fit new and upcoming industries. The article juxtaposes the experiences of Norway and Denmark. Norway, with its powerful petroleum industry has fed vested interests and built institutions to support the already existing industry, to the detriment of renewables. Denmark, lacking a fixed industrial energy structure, used the 1970s oil crises to build a new structure, based around renewables. Both cases support the theory, suggesting that vested interest structures serve as powerful influences on energy policy.