Game-Theoretic Approaches to Multi-Level Governance Conflicts in Renewable Energy Transitions: Equilibrium Analysis and Strategic Incentives

• Minh Duc

  Tay Nguyen University, Le Duan Street 567, Department of Environmental Sciences, Buon Ma Thuot, Vietnam

  Author

• Anh Tuan

  Hong Duc University, Quang Trung Avenue 307, Department of Economics and Development Studies, Thanh Hoa, Vietnam

  Author

• Quang Huy

  An Giang University, Ung Van Khiem Road 18, Department of Natural Resources and Environment, Long Xuyen, Vietnam

  Author

Renewable energy transitions are increasingly shaped by multi-level governance, where national, regional, and local authorities simultaneously pursue decarbonization objectives, fiscal constraints, and political accountability. These overlapping mandates generate strategic conflicts over siting, permitting speed, grid expansion, cost allocation, and distribution of rents from subsidies and congestion revenues. Game-theoretic methods provide a disciplined way to formalize how heterogeneous objectives and institutional veto points translate into observable policy volatility, delay, and underinvestment. This paper develops a family of models for renewable transition conflicts that combine vertical policy delegation, horizontal jurisdictional externalities, and endogenous private investment under uncertainty. The analysis emphasizes equilibrium characterization under limited commitment, incomplete information about local acceptance costs, and intergovernmental fiscal interactions that distort marginal incentives. Static and dynamic equilibria are compared across Nash, Stackelberg, and Markov-perfect formulations to isolate when coordination failures are structural rather than transient. Strategic incentives are studied for common instrument classes including matching grants, revenue sharing, interconnection pricing, and permitting deadlines, with attention to implementability under incentive compatibility and participation constraints. The models also accommodate endogenous opposition and support as strategic actions by communities and developers, allowing conflict to be interpreted as equilibrium behavior rather than an exogenous friction. The result is an equilibrium-based framework that clarifies which institutional adjustments change best responses, which merely shift rents, and how policy packages can be designed to reduce delay without relying on implausible benevolence assumptions.

• PDF