Project 5a – The economics of rapid transitions

Lead staff member: Roger Fouquet

Other project team members: Sam Fankhauser, Maria Waldinger

The scope for rapid transitions towards both decarbonised and climate-resilient economies needs to be better understood. Transitions like these may require preparation to maximise the probability of delivering results in a way that minimises structural disruption to the global economy and keeps transformative options open (e.g. avoid locking in high-emissions infrastructure or economic development in hazard zones). This project is an economic and political-economic analysis of rapid transitions.

Critical issues to consider related to the speed of transitions include: the financial incentives for switching behaviour; the benefits that individuals may gain from the transformation; the role government play in creating the appropriate institutional framework (such as internalising the external costs of pollutants); the industries and other stakeholders that may suffer or benefit from the transition and their role in influencing debate, attitudes and political decisions; the shocks that can trigger unfolding events; other interconnected transformations that will ensue, as well as the general economic conditions; and, finally, the changes in social welfare, including inequality, that may occur.


Transitions are seen by many to be relatively rare and protracted processes. This implies that it is necessary to look at historical experiences for insights. Thus, much of the research on this project will use evidence from economic, technological, political and social history to draw lessons about how they might unfold in the future. The research will involve understanding the factors that influence the speed of transitions and identifying how transitions can be accelerated, as well as exploring the implications of accelerated transitions.

Outputs to date

Fouquet, R. (2016) ‘Path Dependence in Energy Systems and Economic Development.’ Nature Energy 1.

Fouquet, R. (2016) ‘Historical Energy Transitions: Speed, Prices and System Transformation.’ Energy Research & Social Science.

Fouquet, R. (2016) ‘Energy Services.’ In Durlauf, Steven N. and Blume, Lawrence E., (eds.) The New Palgrave Dictionary of Economics. Palgrave Macmillan.

Hippe, R. and R. Fouquet (2015) The human capital transition and the role of policy. GRI Working Paper 185. Grantham Research Institute on Climate Change and the Environment. London School of Economics.

Fouquet, R. (2015) Lessons from Energy History for Climate Policy. GRI Working Paper 209. Grantham Research Institute on Climate Change and the Environment. London School of Economics.

Fouquet, R. and S.N. Broadberry (2015) ‘Seven Centuries of European Economic Growth and Decline.’ Journal of Economic Perspectives 29(4) 227-44.