The Energy Resilience Puzzle: Insights from Market Systems Resilience (MSR)

Energy transitions are not just about lowering emissions, they are about shaping the foundations of resilience and inclusive growth. Countries that embrace renewables can unlock competitive advantages and more resilient futures.

Energy lies at the heart of how societies function, adapt, and grow. Whether powering agriculture, industry, or households, the type of energy system in place has profound implications for resilience, equity, and economic opportunity. Market systems resilience (MSR) lenses provide a powerful way to understand these dynamics, not only by showing how climate change is disrupting traditional coping strategies, but also by uncovering how energy systems themselves can either foster or constrain adaptation. Looking closely at fossil fuel–based systems through an MSR lens reveals that they do more than harm the environment: they actively weaken the resilience of market systems, lock communities into fragile dependencies, and slow inclusive economic growth.

The emergence of market systems resilience (MSR) lenses has provided valuable insights into why and how communities and societies manage risks, including how climate change is disrupting traditional communal coping strategies. As weather patterns become less predictable, many rural communities that once relied on seasonal regularities are struggling to adapt. While MSR assessments often focus on why and how communal, political, civil society, and market systems are testing new coping strategies, they are also revealing additional dynamics that warrant attention.

One such dynamic is the shift of human resources toward wage-labor opportunities through migration or local employment. In many developing country contexts, however, such opportunities are scarce due to weak or underdeveloped processing and manufacturing sectors. The immaturity of these labor-dependent systems leaves communities with limited options, often driving them toward risky pathways, such as migration -  international, regional, or local - that exposes family members to dangerous conditions.

Although still evolving, MSR approaches are increasingly being applied to understand the forces that slow or distort the growth of processing and manufacturing systems. A critical factor emerging from this work is the role of immature or captured energy systems. When applied to fossil fuel–based energy systems, MSR lenses reveal characteristics that exacerbate systemic resilience challenges.

Three Reasons Fossil Fuels Undermine Resilience

1. Inefficient and Costly

   • Extraction gets more expensive as reserves deplete.

   • Renewables are now cheaper and improving faster.

2. Structurally Fragile

   • Centralized, single-source systems collapse under disruption.

   • Overreliance stifles investment in alternatives.

3. Power-Hungry

   • Control over fuel imports and distribution fuels corruption.

   • Energy dependency entrenches political patronage networks.

Fossil Fuel Energy Systems and Fragility

Fossil fuel systems carry cost and structural features that undermine the competitiveness, inclusivity, and resilience of market systems, particularly those reliant on affordable, reliable energy. Extraction, production, and distribution processes are also marked by inherent fragility, making these systems unreliable and vulnerable to capture by actors seeking to extract rents and consolidate political or economic power.

• Inherent cost inefficiencies. Historically, fossil fuels were attractive because they were relatively easy to store, transport, and convert into usable energy for electricity, machinery, transportation, and industry. This advantage was most evident when renewable technologies were still underdeveloped. Substantial subsidies reinforced fossil fuels’ dominance and fueled industrial growth. Yet as renewable technologies advanced rapidly, the inefficiencies of fossil fuels became more visible. Easy-to-access reserves have largely been depleted, forcing investment in harder-to-reach sources at rising costs. These inefficiencies are increasingly pronounced compared to renewables, which continue to improve in cost-effectiveness. When the additional costs of climate change are factored in, fossil fuels look even more outdated and economically unsustainable.

• Structural fragility. To offset extraction and processing costs, fossil fuel systems developed around large-scale plants and centralized infrastructure. This “single-source” structure is inherently fragile, leaving economies vulnerable when supplies are disrupted or become prohibitively expensive. Overdependence on fossil fuels creates paralysis among political and market actors, discouraging investment in alternatives and reinforcing fragility as resources become scarcer.

• Power dynamics. Overreliance on fossil fuels also concentrates political power. In contexts without reserves, governments often frame energy control as a matter of security. Yet once they control the importation, processing, and distribution of fossil fuels, they wield significant leverage over economies and citizens. In many developing countries, this control enables patronage networks and entrenched corruption, sustaining political dominance and locking systems into fragile dependence.

These three characteristics - inefficiency, fragility, and concentrated power - combine to create deep challenges. Fossil fuel systems entrench vested interests, raise costs, and lock political economies into patterns of dependence, preventing the shift to more resilient energy sources. This inertia stifles the growth of key market systems such as manufacturing, light industry, construction, and food processing, all essential foundations for robust labor markets. Without progress in these areas, labor markets remain stagnant, uncompetitive, and exclusionary. Even before considering climate costs, fossil fuels now stand as a barrier to inclusive economic growth.

Renewables and Resilience

By contrast, renewable energy offers pathways that address many of these challenges. While once dismissed as inefficient and costly, renewables have become increasingly viable thanks to accelerating technological advances. In many contexts, they already provide a clear long-term cost advantage. Countries that pivot early to renewables are likely to gain significant competitive benefits.

Renewables are also inherently diversified and decentralized. Wind, solar, hydro, and kinetic energy sources are widely available, encouraging regionally adaptive systems that feed into national grids. Their distributed nature enables individuals, communities, companies, and institutions to generate power, use what they need, and feed surplus back into the system. This diversity makes renewable systems less fragile and harder to capture politically or economically.

Storage remains a challenge, but advances are progressing rapidly. Fossil fuels once faced similar barriers yet received massive subsidies to overcome them. Renewables deserve comparable support to ensure resilience, reliability, and cost-effectiveness.

“So What?”

Looking through an MSR lens makes one thing clear: fossil fuel–based energy systems are not only environmentally costly but also structurally and politically corrosive. They entrench inefficiency, fragility, and power imbalances that undermine the resilience of market systems and stall inclusive economic growth. By contrast, renewables offer diversified, adaptive, and increasingly cost-effective alternatives that can empower communities, reduce fragility, and unlock new opportunities for labor markets and industries.

The “so what” is this: energy transitions are not only about reducing carbon emissions, they are about shaping the foundations of resilience and inclusivity in societies. Countries that act decisively to foster renewable systems will not just mitigate climate risks, they will build the resilient market systems needed for sustainable, inclusive growth.

Author:

Michael Field, Senior Systems Thinking Specialist, Vikāra Institute