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Symposium 2014

Climate and Competitiveness

The Challenge

Concerns have risen concerning the pressures that progressive climate policies could incur on industrial competitiveness, especially in Europe. It is often assumed that climate friendly policies are accompanied by high and rising energy prices, which supposedly reduce CO2 emissions. Secondly, it is further assumed that these higher prices tend to impact industry’s competitiveness negatively, especially in energy-intensive industries. Both assumptions have inspired loud warnings to decelerate or delay climate change policies in order to rescue industries and employment.

This session will examine evidence to determine if and to which extent progressive climate policies are actually leading to costs and lower competitiveness. Countries like Germany, which are known for ambitious climate policies and targets, have simultaneously experienced significant export success. Even in energy-intensive industries, and in spite of disproportionately rising energy costs, there are few signs of a loss in overall competitiveness. Competitiveness is based on a broad range of drivers.

As industrial studies have shown, progress in reducing CO2 emissions often goes hand in hand with innovation at a national, sectoral or company level, thus fostering competitiveness. This puts into question the common view that a choice must be made between aggressive climate policies and economic strength. A study on challenges and opportunities in the low-carbon transition of the EU’s chemical sector, conducted by ECF with analytical support from McKinsey & Co., has come to the conclusion that there is potential for a more than 50% further reduction in carbon emissions. Moreover, the majority of this abatement potential would have positive effects on competitiveness. Unlocking this potential requires cross-process, cross-sector, and transnational perspectives and integration capabilities.

We will examine the robustness of these results as well as the political implications. If the diagnosis is true, how could governments encourage firms to explore the sort of abatement that fosters competitiveness? And how could additional abatement opportunities be unlocked, when these opportunities touch complex production processes, recycling or broader innovations, which go way beyond conventional intra-firm CO2 abatement. Finding solutions to these issues would open a whole new sphere where economic success and successful climate policies go hand in hand.

    Virtual Library

    Virtual Library File
    Symposium 2014

    An Economic Assessment of low Carbon Vehicles - Executive Summary

    Europe could enhance its growth prospects and create additional employment through innovation to improve vehicle efficiency, according to analysis by Cambridge Econometrics and Ricardo-AEA. The repo ...

    Europe could enhance its growth prospects and create additional employment through innovation to improve vehicle efficiency, according to analysis by Cambridge Econometrics and Ricardo-AEA. The report Fuelling Europe’s Future was commissioned by the European Climate Foundation and was informed by a panel of experts from the motor vehicles industry and other transport sector stakeholders.

    Virtual Library File
    Symposium 2014

    Understanding the challenges and opportunities for the chemical sector

    Is there a way for Europe to increase its competitiveness, while at the same time reducing its greenhouse gas emissions? This is the key question that the European Climate Foundation asks in a study ...

    Is there a way for Europe to increase its competitiveness, while at the same time reducing its greenhouse gas emissions? This is the key question that the European Climate Foundation asks in a study looking at the relationship between emissions reductions and competitiveness, using the European chemicals industry as a case study.

    The ECF authored the report with analytical support from McKinsey & Company and in consultation with a group of industry representatives and academics. It highlights the need for a broader notion of competitiveness to enable Europe to profit from the challenges of the transition. As a major share of emissions reduction opportunities identified in the study lie in cross-company and cross-sector integration, the question is raised as to how industry and policy makers can interact effectively to unlock these more complex opportunities.