‘Creative Destruction’: The Nobel prize winning model central to the energy transition
In this article published 3 November 2025, Carlota Garcia-Manas and Melanie Baker, address the announcement of the 2025 Nobel Prizes in Economics. The work of awarded economists Joel Mokyr, Philippe Aghion, and Peter Howitt argues that the global shift to a net-zero economy is one of the most ambitious acts of creative destruction in modern history. Referring to a cycle of innovation where new technologies, goods, firms and ways of working replace old ones, creative destruction provides a powerful lens for understanding the energy transition:
The article outlines:
- The importance of innovation-driven growth and how the transition from fossil fuels to a net‑zero economy exemplifies creative destruction,
- The need for strong institutional frameworks, including consistent policy signals, infrastructure investment, carbon pricing, and support for affected sectors,
- And what this might mean for investors hoping to secure long-term resilience.
read the full article:
The Nobel Prize in economics and the link to the energy transitionRelated Content
Energy Transitions Commission: Power Systems Transformation Report
The Energy Transitions Commission report, Power Systems Transformation: Delivering Competitive, Resilient Electricity in High-Renewable Systems sets out the case for how wind and solar generation can reliably deliver electricity at costs comparable to or lower than current fossil fuel-based power systems in most parts of the world. A useful read for boards looking to understand the possibilities of the global energy transition.
Read: Financing the UK energy transition
Read Deloitte's Financing the UK energy transition blog from March 2025, which uses an investor survey to decipher what is required for companies to hit their decarbonisation targets and reach the next step in their energy transition journey.
