Low-carbon transition risks in the energy sector: A systematic review

Abstract

As the low-carbon energy transition advances, various risks emerge, potentially causing delays in the transition process. Here, we presented a systematic literature review on low-carbon transition risks in the energy sector. Following the Preferred Reporting Items for Systematic Reviews and Meta-Analyses (PRISMA) guidelines, we identified 89 articles for analysis. In this review, we found that: (1) Research on low-carbon transition risks in the energy sector has attracted increasing attention, with many studies focusing on the exploration of risks in European countries. (2) Various risks may arise during the low-carbon transformation of the energy sector. These risks can be classified according to the causes/potential consequences of risk and the phase of risk occurrence. (3) Low-carbon transition risks differ in their triggering causes. (4) Case studies, optimization models, prediction models, and macroeconomic models are widely used to assess low-carbon transition risks. (5) A variety of risk mitigation strategies (e.g., applying technical and financial assistance, developing unbiased energy policies) can be adopted to cope with low-carbon transition risks. We concluded this review with an outlook on future research directions. Future research should be directed at expanding the research regions beyond the commonly studies European countries, formulating tailored risk mitigation strategies for neglected categories of risks, providing guidelines on the selection of appropriate assessment methods for specific categories of risks, etc.