Energy, industry and politics: Energy, vested interests, and long-term economic growth and development

The article seeks to explicate a link between energy and long-term economic growth and development. While in many ways intuitive, attempts at sketching theoretical frameworks explicating this link have been few and simplistic, typically limited to technology and economics. This article emphasizes the importance of politics as well, fostering a symbiosis between the dominant industries of a historical epoch and the energy system that enabled them to flourish. The framework combines Joseph Schumpeter and Mancur Olson, emphasizing 1) the importance of structural economic change for long-term growth and development and 2) vested interests. The framework yields one theoretical proposition: In order to rise, states must prevent vested interests from blocking structural change. States that are unable to do this will get locked into yesterday's technologies, industries and energy systems, effectively consigning themselves to stagnation and decline. A brief empirical section provides historical data from 6 historical epochs (including present-day renewables) over a period of 250 years to demonstrate the usefulness of the approach. While no exhaustive test, the data suggests that countries that have prevented vested interests from blocking change have been far more successful in fostering a symbiosis between energy and industry than those countries that have not. (C) 2009 Elsevier Ltd. All rights reserved.