Combating climate change will require substantial productive investments around the world. This so-called carbon neutral transition requires both emission reductions in all sectors and the strengthening of carbon sinks. A carbon neutral transition will cause structural changes in production, distribution, and consumption. The transition is currently underway, but with further tightening emission standards, the effects are likely to be exacerbated in the near future. Some companies will gain a competitive advantage from tightening emission standards, while others will lose market share.
This research project explores the channels through which a carbon neutral transition can strengthen or weaken productivity and competitiveness. In addition, the structural productivity and competitiveness effects of the transition at company and industry level so far will be examined, the possible future effects will be assessed and the potential investment needs of a carbon neutral transition will be examined.
Structural changes caused by the carbon neutral transition are very closely connected to companies’ productivity and competitiveness. These structural changes can either strengthen or weaken the industry’s or the entire company sector’s productivity growth. On the other hand, companies’ productivity and competitiveness impact on the industry’s structure.
Based on the results of the project, policy measures are proposed to support carbon neutral transition in a way that promotes productivity and competitiveness.
The results of the project will be reported in a final report to be completed in December 2023 and in a Policy Brief summarizing the results