The global shift towards a clean-energy system is much more than just a technological switch – it is a profound transformation of markets, industries and societal behaviours.
This complex undertaking is often characterised by “non-linearity” and “feedback loops”, where small changes can go on to have disproportionately large impacts and where seemingly straightforward paths encounter unexpected roadblocks.
Interventions can be self-amplifying – leading to runaway change, or they can be self-defeating – when progress seems impossible to attain.
Our new policy brief sheds light on these intricate dynamics, which can be overlooked when governments use analytical frameworks based on standard economic thinking.
The brief sets out the most common archetypes of system change and behaviour, as well as the underlying feedback loops that drive them, with the aim of helping policymakers to understand the recurring patterns that can either accelerate or impede progress.
Governments that can recognise these patterns – as well as the ways they can be harnessed or sidestepped – are likely to be better equipped to manage structural change.
This article delves into three key examples from the policy brief, exploring how they are influencing the energy transition and what lessons can be drawn for effective policymaking.
Reinforcing feedback loops
At the heart of the energy transition lies a powerful engine: the reinforcing feedback loops inherent in the development and diffusion of many clean-energy technologies.
This virtuous cycle operates through several mechanisms.
First, “learning by doing”, which means that as more units of a technology, such as solar panels or wind turbines, are produced and deployed, manufacturers and developers become more efficient, processes are refined and costs fall.
Second, economies of scale kick in: as production volumes increase, unit costs decrease due to efficiencies in manufacturing and more developed supply chains.
Finally, wider deployment can trigger network effects and the emergence of complementary innovations. This means that as the adoption of a given technology grows, it can foster an ecosystem of supporting infrastructure, skilled labour and supporting technologies, which can further boost its attractiveness and viability.
Together, these three elements create a powerful reinforcing loop: initial investment drives innovation and cost reduction, which spurs increased demand, attracting further investment.
Solar photovoltaics (PV) and wind turbines are prime examples of this dynamic.
The astonishing growth of solar offers a particularly vivid illustration of the way in which reinforcing feedback loops can blindside experts and policymakers alike.
Solar growth has far exceeded projections made in the early 2000s. Indeed, the world’s actual installed capacity in 2020 was over 700 gigawatts (GW), more than ten times the level expected in outlooks published in 2006, as shown in the figure below.
Global solar deployment has exceeded expectations due to disparate trends and drivers in individual markets that, together, all point in the same direction. China, for instance, met its 2030 target for wind and solar capacity six years ahead of schedule in 2024.
Batteries are also riding this wave, with costs plummeting by around 85% over the past decade as deployment, particularly in road transport, scales up.
However, not all clean-energy technologies benefit from this self-amplifying pattern.
Nuclear power and hydropower, for example, have historically not shown the same rapid cost declines, due to their large, complex and site-specific nature. This contrasts with the smaller, modular and replicable characteristics of technologies, such as solar PV.
This does not negate the potential role of such technologies, but it does mean that they are less likely to see disruptive, exponential and self-reinforcing growth.
There are a number of potential conclusions for policymakers.
Early in the transition, interventions such as feed-in tariffs and public procurement were crucial in kick-starting these reinforcing feedbacks for solar and wind.
As these technologies mature and become cost-competitive, the focus shifts to removing other barriers, such as streamlining permitting processes, investing in grid expansion and reforming markets so they are better able to integrate variable renewable output.
These same principles could now be applied to newly emergent clean-energy technologies. Policies that directly nurture these reinforcing loops, such as deployment subsidies and clean technology mandates, can be expected to be most effective in the initial stages.
Turning again to the example of solar energy, while such initial efforts appeared to be expensive, they paid off over time by unlocking future cost reductions and, thus, kick-starting the self-amplifying feedback loops that are now driving further progress.
This contrasts with the idea that carbon pricing is necessarily the most efficient policy for decarbonisation. It may well be helpful, but as it will not drive rapid early technology adoption, it is less likely to have a self-amplifying effect in the initial stages of the transition.
Renewable ‘cannibalisation’
While the growth of renewable energy is the driving force of the energy transition, another system dynamic, termed “renewable cannibalisation“, can act as a dampening feedback loop. This can potentially slow progress long before full decarbonisation is achieved
This cannibalisation process results in variable renewable energy (VRE) sources, such as solar and wind, receiving decreasing prices for the electricity they generate.
Essentially, the more solar and wind capacity that is connected to the grid, the more they undermine their own revenue. This happens through three main channels.
First, the merit order effect, whereby solar and wind, which have very low operating costs, push more expensive fossil-fuel generators out of the market when supply is abundant.
In markets with marginal pricing, this leads to lower wholesale electricity prices during periods of high renewable output. While this cuts prices for consumers – at least in the short term – these lower prices also reduce revenues for renewable generators, potentially undermining the economic case for further investment.
For example, in California, solar power unit revenues fell by $1.30 per megawatt hour (MWh) for each percentage point increase in solar penetration between 2013 and 2017.
Second, price volatility, where uncertainty over future trends in the generation mix and the balance between supply and demand can make long-term revenues difficult to predict.
This increased uncertainty can raise the cost of capital for new renewable projects, again acting as a brake on investment
The UK, for example, experienced this before the introduction of “contracts for difference” (CfDs), which helped stabilise revenue expectations for renewable developers.
Third, volume risk, where rising VRE capacity increases the likelihood of more frequent curtailment – periods when renewable generation exceeds demand or grid capacity, forcing generators to scale back output and lose potential revenue.
Curtailment in itself is nothing new, but the scale and frequency is changing. Recent analysis by University College London suggests that without significant flexibility or storage, UK renewable generation could exceed demand for more than 50% of the time by 2030.
The analysis found that installed wind and solar capacity is set to surge beyond current levels of electricity demand, as illustrated in the figure below, finding that this could “deter investment” in new projects if no action is taken to address the problem.
These dampening feedback loops illustrate a classic “limits to success” scenario. The very success of renewables, if unmanaged, can create conditions that hinder their continued expansion.
The policy implications here are nuanced. One solution is CfDs, which offer renewable generators a fixed price and have been effective in many countries at mitigating the merit order effect and price volatility, thus maintaining investment.
However, as VRE penetration becomes very high and surplus generation becomes a regular occurrence, other solutions are likely to be needed. This is because existing CfD designs often include clauses that stop payments when market prices drop below zero.
As a result, alternative CfD designs, guaranteeing revenues based on installed capacity or potential – rather than actual – electricity generation might be considered, for example, even though these have other drawbacks.
More fundamentally, our research suggests the solution to this challenge lies in fostering the co-evolution of renewables with technologies such as energy storage and green hydrogen production. These can absorb surplus generation and turn a problem into an opportunity.
Whereas, traditionally, it might be assumed that the market on its own can optimally allocate risk, research suggests that a redesign of market structures may be needed to enable investment and fully realise the cost-saving opportunities of the new technologies.
This is one of several sets of feedbacks discussed in a separate new report published today, looking at the power sector transition in China.
The power of connection
The energy transition is not a series of isolated changes in different sectors. Instead, it is an interconnected system, where progress in one area can catalyse shifts elsewhere. Shared technologies can create reinforcing feedbacks that accelerate decarbonisation across multiple fronts, generating cross-sector synergies.
The relationship between clean power and transport electrification is a powerful example of this. As batteries are deployed at scale in electric vehicles (EVs), their costs fall, enabling ever-wider deployment and further cost declines, as shown in the chart below.
This is due to the learning-by-doing and economies-of-scale feedbacks discussed above.
This cost reduction then makes batteries more viable for grid-scale energy storage, which, in tur, helps integrate more low-cost VRE into the power system.
Cheaper, cleaner electricity then further incentivises the electrification of transport, as well as heating and light industry. This increased electrification boosts demand for renewable power, driving further deployment and cost reductions in solar and wind. It also expands the potential for demand-side response, where consumers adjust their electricity use to help balance the grid.
A similar dynamic is anticipated for “green” hydrogen. As deployment in one anchor sector – perhaps fertilisers or refining – drives down the cost of electrolysers, it makes green hydrogen more competitive for other applications, such as shipping or even long-duration energy storage in the power sector.
Each sector’s adoption of green hydrogen contributes to the shared learning and cost reduction, benefiting all.
The policy implications of these cross-sector synergies could be significant. Their existence suggests, for example, that there is no need to wait for decarbonisation of the power sector to advance further, before beginning the electrification of transport, heating or industry.
This is in contrast to the argument that transport should only be electrified after cutting power sector emissions, since increased EV charging will drive up demand for gas- or coal-fired generation.
While there will be a marginal increase in emissions from plugging a new EV into the power grid, the insights described in our brief imply that it is still likely to be more effective to pursue the transition away from fossil fuels in multiple sectors in parallel, because it can activate beneficial cross-sector feedback loops that are greater than the sum of their parts.
As such, our research suggests that policymakers hoping to take advantage of cross-sector synergies could aim to deliberately strengthen technological linkages between different parts of the energy system. Examples include electricity tariffs and market structures that reward “smart” EV charging and vehicle-to-grid (V2G) services, encouraging industrial participation in demand-side response and promoting integrated home energy systems. These interactions can amplify the benefits of early investment in the transition.
Policy insights from system dynamics
Archetypes such as the self-reinforcing growth of clean technologies, the potential for renewable cannibalisation, the accelerating power of cross-sector synergies and seven others described in our new report paint a picture of a transition that is far from linear. Instead, we find that it is governed by complex interdependencies and feedback loops.
Consequently, our research suggests that policymakers will be much better equipped to manage and steer the transition, if they adopt a systems thinking approach.
Recognising these recurring patterns allows for the design of more robust and effective policies that anticipate challenges and leverage opportunities.
For instance, understanding the power of reinforcing feedback loops in technology diffusion underscores the value of early-stage support for nascent clean-energy technologies.
Conversely, anticipating the dampening effects of renewable cannibalisation highlights the likely benefits of combining renewable buildout with evolving market designs and strategic investments in flexibility solutions, such as storage and demand-side response.
Policymakers that understand and work with these dynamics are likely to be in a better position to spark self-amplifying changes – achieving maximum value for minimum effort – and to avoid self-defeating interventions that go nowhere.
The post Guest post: How ‘feedback loops’ and ‘non-linear thinking’ can inform climate policy appeared first on Carbon Brief.
Guest post: How ‘feedback loops’ and ‘non-linear thinking’ can inform climate policy
More than 100 countries have cut their dependence on fossil-fuel imports and saved hundreds of billions of dollars by continuing to invest in renewables, according to the International Energy Agency (IEA).
It says nations such as the UK, Germany and Chile have reduced their need for imported coal and gas by around a third since 2010, mainly by building wind and solar power.
Denmark has cut its reliance on fossil-fuel imports by nearly half over the same period.
Renewable expansion allowed these nations to collectively avoid importing 700m tonnes of coal and 400bn cubic metres of gas in 2023, equivalent to around 10% of global consumption.
In doing so, the fuel-importing countries saved more than $1.3tn between 2010 and 2023 that would otherwise have been spent on fossil fuels from overseas.
Reduced reliance
The IEA’s Renewables 2025 report quantifies the benefits of renewable-energy deployment for electricity systems in fossil fuel-importing nations.
It compares recent trends in renewable expansion to an alternative “low renewable-energy source” scenario, in which this growth did not take place.
In this counterfactual, fuel-importing countries stopped building wind, solar and other non-hydropower renewable-energy projects after 2010.
In reality, the world added around 2,500 gigawatts (GW) of such projects between 2010 and 2023, according to the IEA, more than the combined electricity generating capacity of the EU and US in 2023, from all sources. Roughly 80% of this new renewable capacity was built in nations that rely on coal and gas imports to generate electricity.
The chart below shows how 31 of these countries have substantially cut their dependence on imported fossil fuels over the 13-year period, as a result of expanding their wind, solar and other renewable energy supplies. All of these countries are net importers of coal and gas.
In total, the IEA identified 107 countries that had reduced their dependence on fossil fuel imports for electricity generation, to some extent due to the deployment of renewables other than hydropower.
Of these, 38 had cut their reliance on electricity from imported coal and gas by more than 10 percentage points and eight had seen that share drop by more than 30 percentage points.
Security and resilience
The IEA stresses that renewables “inherently strengthen energy supply security”, because they generate electricity domestically, while also “improving…economic resilience” in fossil-fuel importer countries.
This is particularly true for countries with low or dwindling domestic energy resources.
The agency cites the energy crisis exacerbated by Russia’s invasion of Ukraine, which exposed EU importers to spiralling fossil-fuel prices.
Bulgaria, Romania and Finland – which have historically depended on Russian gas for electricity generation – have all brought their import reliance close to zero in recent years by building renewables.
In the UK, where there has been mounting opposition to renewables from right-wing political parties, the IEA says reliance on electricity generated with imported fossil fuels has dropped from 45% to under 25% in a decade, thanks primarily to the growth of wind and solar power.
Without these technologies, the UK would now be needing to import fossil fuels to supply nearly 60% of its electricity, the IEA says.
Other major economies, notably China and the EU, would also have had to rely on a growing share of coal and gas from overseas, if they had not expanded renewables.
As well as increasing the need for fossil-fuel imports from other countries, switching renewables for fossil fuels would require significantly higher energy usage “due to [fossil fuels’] lower conversion efficiencies”, the IEA notes. Each gigawatt-hour (GWh) of renewable power produced has avoided the need for 2-3GWh of fossil fuels, it explains.
Finally, the IEA points out that spending on renewables rather than imported fossil fuels keeps more investment in domestic economies and supports local jobs.
The post IEA: Renewables have cut fossil-fuel imports for more than 100 countries appeared first on Carbon Brief.
IEA: Renewables have cut fossil-fuel imports for more than 100 countries
Panama’s environment minister has joined a growing push for reform of the UN climate change negotiations, proposed by campaigners and academics in recent years – one of the first such calls by a minister directly involved in the talks.
Juan Carlos Navarro told Climate Home in a recent interview on the sidelines of Climate Week in New York that the current system for approving decisions – which requires all countries to agree by consensus – has not delivered good enough results and should instead use a majority or super-majority decision-making process.
“By consensus, you cannot get 186 nations to agree on anything. It’s a miracle we have come so far,” said Navarro. “We need to change the rules so we have a basic, rational, majority or super-majority decision-making process where we can do things better and faster.”
The comments follow pressure from civil society and academics to reform the UN climate process. In June, more than 200 campaign groups issued a joint call to reform the decision-making process, which they argued can be blocked by oil and gas-producing countries and has reached a “breaking point”.
Andreas Sieber, policy director with climate advocacy group 350.org, said he was sympathetic to Panama’s proposal, but added “it would just be part of a puzzle” to make the UN climate talks work more efficiently.
He added that it could be hard to get over the line as earlier efforts to secure a rule on voting as a last resort had met with fierce opposition from oil-producing countries – and decisions reached by consensus have the weight of having all the countries behind them, he noted.
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Erika Lennon, Senior Attorney at the Center for International Environmental Law, celebrated that more people are talking about potential changes to the UNFCCC, as “being totally beholden to consensus-based decision making is not leading to the outcomes that we need”.
She also agreed that voting is just part of the solution, and suggested possible reforms could include increased transparency in the negotiation rooms, inclusion of civil society and indigenous groups, and a conflict of interest rule that blocks fossil fuel companies from participating.
During last year’s COP29 in Baku, a group of experts known as the Club of Rome – among them the former UN climate chief Christiana Figueres and former UN Secretary-General Ban Ki Moon – issued an open letter proposing ways to modernise the climate process.
The current structure of COPs “simply cannot deliver the change at exponential speed and scale, which is essential to ensure a safe climate landing for humanity”, the letter said. They argued instead for “smaller, more frequent, solution-driven meetings” where countries can discuss progress and be held accountable.
At that same COP in Azerbaijan, Saudi Arabia managed to block all mentions of fossil fuels in text summarising discussions on cutting greenhouse gas emissions. It was able to do this despite all countries having agreed to transition away from fossil fuels in energy systems just one year earlier at COP28.
UN Climate Change consults on COP process
In a speech at Climate Week in New York, Simon Stiell, the executive secretary of UN Climate Change, noted that recent COPs have delivered “concrete results and global steps forward”, adding that cooperation under the process has lowered expected global warming from 5C to closer to 3C.
But, he conceded, it is “imperfect”. “As this new era of implementation gathers pace, we must also keep evolving, and striving towards faster, fully-inclusive, higher-quality decisions that tie the formal process ever-closer to real economies and real lives,” he said.
Senior experts have been asked to examine how the UN climate process could be improved and will deliver their ideas to Stiell later this year. The secretariat will consult with countries on any potential reforms it wants to pursue in 2026, the UN’s climate chief added.
Brazil, the host country of this year’s COP, has put the focus on global mobilisation to implement in practice what governments signed up to in the 2015 Paris Agreement. Last year it proposed setting up a UN Climate Change Council in order to support that work, but this proposal does not seem to have gained much traction amid geopolitical tensions and Trump’s attacks on multilateral climate action.
Downsizing COPs?
Panama’s Navarro added that the UN climate summit has grown too big, making its scope “ridiculous”. In 2023, over 83,000 people attended COP28 in Dubai, while COP29 in Baku saw fewer, with 66,778 registered participants.
Navarro said the COP meetings had become an anachronism. “You have thousands and thousands of people who are living off the story,” he said. “They’re living off these meetings, just sitting around the world on expense accounts, creating a bigger carbon footprint for the planet, and we’re not achieving anything.”
In April 2024, UNFCCC head Stiell said personally he “would certainly like to see future COPs reduce in size”, telling an audience at London’s Chatham House think-tank that “bigger doesn’t necessarily mean better”.
This year, COP30 will be held in the Amazon city of Belem, which poses “self-evident” financial and logistical limitations, according to Navarro, who praised Brazil for being open to hearing the complaints from the Global South countries on this topic.
After many delegations complained over the high costs of accommodation and difficult access, Brazil offered cruise-ship rooms and price caps, and the UN has increased the daily subsidy for diplomats from most developing nations to attend the summit.
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‘Less hypocrisy, more concrete results’
“Having said that, and coming back to the point of what COPs have become, I wish that COPs were less bullshit, more concrete results,” Navarro told Climate Home.
His own country – which is judged to be carbon-negative, thanks to its extensive carbon-storing forests – recently published its “Nature Pledge”, combining climate, biodiversity and conservation pledges. Those include restoring 100,000 hectares of ecosystems such as degraded mangroves by 2035, maintaining 30% of Panama’s land and seas under protection and absorbing 5 million tons of CO₂.
Practical measures to achieve that include new equipment for park rangers, more radars to monitor and catch illegal fishing, and fines for polluting industries.
Panama has also set up a Nature Fund, which aims to collect $150 million-$200 million for conservation projects using resources like blue carbon bonds, debt-for-nature swaps and a national carbon market backed by blockchain with revenues going to the public sector to ensure “transparency and accountability”.
Without specifying which, Navarro called out “countries that do an incredible job of greenwashing, talking about conservation and talking about the environment – and they’re either oil producers or plastics producers, or kill whales or are destroying our fisheries, or keep building coal power plants or keep polluting”.
“We’ve run out of time for all of these hypocritical individuals, corporations – or even nations,” he added.
The post Panama environment minister backs calls for reform of UN climate process appeared first on Climate Home News.
Panama environment minister backs calls for reform of UN climate process
Researchers are using satellite images and AI-powered modelling to map global mining activity, seeking to plug gaps in existing data as the rush for “transition minerals” fuels concerns about the industry’s impact on the environment and local communities.
Countries are scrambling to shore up supplies of metals vital for the transition to renewables, such as lithium used in electric vehicle (EV) batteries, and copper – used in solar panels and wind turbines, many of which are produced in environmentally sensitive areas.
“New mines will likely be in areas of high biodiversity, or where water and Indigenous rights are at stake,” project lead Victor Maus from the Vienna University of Economics and Business told Climate Home News.
More than half of energy transition mineral resources are located on or near the lands of Indigenous peoples and subsistence farmers, according to a 2022 study published in the Nature journal.
“Monitoring those impacts is critical,” said Maus, whose team members have identified massive gaps in current data when it comes to what, how and even where minerals are being extracted around the world.
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During a previous project, they compared global satellite imagery of 120,000 square kilometres of visible mine footprints with the S&P Capital IQ Pro database of mining production. The results were stark. More than half of the mining areas identified from space had no corresponding production data in the official record.
To address these gaps, Maus and his team are building a mining database using satellite images. The project, which is part of the European Union-funded Mine the Gap initiative, will be a vital tool for policymakers and help foster transparency in the mining industry, he added.
“We’re hoping to create not only a research tool but also a means of validating and complementing what companies report, supporting greater transparency across the sector.”
Mapping environmental impact
As well as counting mines and assessing overall production, the database will give a clearer picture about where the biggest environmental and social risks lie by tracking land use around mines, waste generation and signs of environmental degradation.
“Simply knowing how much is being produced isn’t a direct measurement of impact,” said Tim Werner, a senior lecturer at The University of Melbourne who has worked with Maus on previous research into critical minerals.
“We simply don’t have all the information we need to scientifically prove where impacts for one area are worse than others. This is a big problem for strategic environmental management at national and global scales,” he added, describing the data gaps as “mind-boggling”.
A range of satellites are being used to collect the required information, including multispectral imagery, radar and hyperspectral sensors, collected from sources including the EU’s Sentinel constellation and German DLR satellites, chosen for their global coverage and accuracy.
AI will then be used to scan these images, learning how to identify and track potential issues as the project develops.
The challenges of collecting mining data
There have been previous attempts to map the overlap between energy transition mineral mines and key biodiversity hotspots in different mineral-rich countries, as well as industry efforts to plug the gaps in data about global mining production.
But past efforts to map global mining more accurately have struggled to document small-scale and artisanal mining operations, which are often unregulated despite their significant social and environmental impacts.
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In September, the International Council on Mining and Metals (ICMM) launched its global mining database – reportedly the most comprehensive mining resource to date, with information about more than 15,000 active facilities in 151 countries, but it does not include informal mining sites.
“We had to draw some scope boundaries,” said Emma Gagen, the ICMM’s data and research director. “The industry is huge and that’s been the challenge this whole time – people haven’t tried to collect this data before because it’s so vast.”
The case for clearer global standards
Despite such data initiatives, which reflect growing pressure on the industry to clean up its act, researchers say structural and legislative changes will be needed to reduce the harms caused by mining.
Gagen said more uniform regulatory standards would “drive performance improvements across the industry.”
“What’s most needed is alignment,” Maus said. “Clearer global standards on what should be measured and reported, and policies that encourage disclosure of mining data.”
For Maus and his team, having an accurate picture is a crucial first step.
“If we don’t even know how many materials are being produced, we’ve got very little basis to even understand the scale of possible impacts in an area,” Werner said.
Main image: Satellite image showing the expansion of nickel mining in Sulawesi, Indonesia (Photo: Sentinel-2 cloudless by EOX IT Services GmbH, which contains modified Copernicus Sentinel data 2024)
The post AI and satellite data help researchers map world’s transition minerals rush appeared first on Climate Home News.
AI and satellite data help researchers map world’s transition minerals rush
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