The geoeconomic turn in decarbonization.

Area of Science:

• Climate Policy
• Green Industrial Policy
• International Relations

Background:

• Climate policy historically focused on cooperative cost-sharing for emissions reductions.
• A new era of green industrial policy emphasizes geoeconomic competition alongside cooperation.
• Governments now invest in clean technologies for economic development, energy security, and climate mitigation.

Purpose of the Study:

• To analyze the implications of the geoeconomic turn in decarbonization efforts.
• To identify global spillovers and research needs related to green industrial policy.
• To address fundamental questions for policymakers on designing and managing industrial policy.

Main Methods:

• Analysis of the shift from cooperative climate policy to geoeconomic competition.
• Examination of government investments in clean technology manufacturing and deployment.
• Assessment of the potential benefits and pitfalls of geoeconomic competition for decarbonization.

Main Results:

• Geoeconomic competition can accelerate decarbonization through technology deployment and cost reduction.
• Potential negative consequences include trade protectionism, international conflict, and widening economic divides.
• The overall impact of the geoeconomic turn on global decarbonization remains uncertain.

Conclusions:

• Policymakers face complex challenges in designing industrial policy amidst competing economic, climate, and security goals.
• Effective management of geoeconomic competition is crucial for equitable and effective global decarbonization.
• Further research is needed to navigate the trade-offs and opportunities presented by the new era of green industrial policy.