Cahen-Fourot, L., Campiglio, E., Godin, A. et al. (2 more authors) (2021) Capital stranding cascades: The impact of decarbonisation on productive asset utilisation. Energy Economics, 103. 105581. ISSN 0140-9883
Abstract
A timely low-carbon transition will require a significant decline in fossil fuel production and consumption. This in turn exposes the rest of economic sectors to the risk of reduced usability of physical capital stocks via international production network linkages. We propose and apply a simple measure to assess the extent to which fossil shocks might trigger underutilisation of capital stocks across countries and productive sectors (‘stranding multipliers’). Our results highlight the relevance of supply-side transition risks. First, among all productive activities, the global fossil sector exhibits the highest stranding multiplier on the rest of the economic system. Second, some of the most exposed sectors are downstream activities, mainly affected by second-round effects. Third, we rank countries according to their external stranding potential, finding France, Australia and Slovakia at the top, and the USA, Italy and China at its bottom. Finally, we rank countries according to their exposure to stranding risk and analyse more in depth the origins and transmission channels of the stranding links affecting some of the most exposed countries (USA, China and Germany).
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2021 The Authors. This is an open access article under the terms of the Creative Commons Attribution License (CC-BY-NC-ND 4.0). |
Keywords: | Low-carbon transition, Asset stranding, Transition risks, Production networks, Capital stocks, Fossil fuels, Supply-side policies |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Environment (Leeds) > School of Earth and Environment (Leeds) > Sustainability Research Institute (SRI) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 10 Feb 2025 11:40 |
Last Modified: | 10 Feb 2025 11:40 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.eneco.2021.105581 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:223017 |