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Global climate policy and deep decarbonization of energy-intensive industries

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  • Max Åhman
  • Lars J. Nilsson
  • Bengt Johansson
Abstract
If we are to limit global warming to 2 °C, all sectors in all countries must reduce their emissions of GHGs to zero not later than 2060–2080. Zero-emission options have been less explored and are less developed in the energy-intensive basic materials industries than in other sectors. Current climate policies have not yet motivated major efforts to decarbonize this sector, and it has been largely protected from climate policy due to the perceived risks of carbon leakage and a focus on short-term reduction targets to 2020. We argue that the future global climate policy regime must develop along three interlinked and strategic lines to facilitate a deep decarbonization of energy-intensive industries. First, the principle of common but differentiated responsibility must be reinterpreted to allow for a dialogue on fairness and the right to development in relation to industry. Second, a greater focus on the development, deployment and transfer of technology in this sector is called for. Third, the potential conflicts between current free trade regimes and motivated industrial policies for deep decarbonization must be resolved. One way forward is to revisit the idea of sectoral approaches with a broader scope, including not only emission reductions, but recognizing the full complexity of low-carbon transitions in energy-intensive industries. A new approach could engage industrial stakeholders, support technology research, development and demonstration and facilitate deployment through reducing the risk for investors. The Paris Agreement allows the idea of sectoral approaches to be revisited in the interests of reaching our common climate goals.Policy relevanceDeep decarbonization of energy-intensive industries will be necessary to meet the 2 °C target. This requires major innovation efforts over a long period. Energy-intensive industries face unique challenges from both innovation and technical perspectives due to the large scale of facilities, the character of their global markets and the potentially high mitigation costs. This article addresses these challenges and discusses ways in which the global climate policy framework should be developed after the Paris Agreement to better support transformative change in the energy-intensive industries.

Suggested Citation

  • Max Åhman & Lars J. Nilsson & Bengt Johansson, 2017. "Global climate policy and deep decarbonization of energy-intensive industries," Climate Policy, Taylor & Francis Journals, vol. 17(5), pages 634-649, July.
    • Handle: RePEc:taf:tcpoxx:v:17:y:2017:i:5:p:634-649
    DOI: 10.1080/14693062.2016.1167009
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    1. Henrik Horn & Petros C. Mavroidis, 2011. "To B(TA) or Not to B(TA)? On the Legality and Desirability of Border Tax Adjustments from a Trade Perspective," The World Economy, Wiley Blackwell, vol. 34(11), pages 1911-1937, November.
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    2. Malico, Isabel & Nepomuceno Pereira, Ricardo & Gonçalves, Ana Cristina & Sousa, Adélia M.O., 2019. "Current status and future perspectives for energy production from solid biomass in the European industry," Renewable and Sustainable Energy Reviews, Elsevier, vol. 112(C), pages 960-977.
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    6. Sandberg, Erik & Toffolo, Andrea & Krook-Riekkola, Anna, 2019. "A bottom-up study of biomass and electricity use in a fossil free Swedish industry," Energy, Elsevier, vol. 167(C), pages 1019-1030.
    7. Deger Saygin & Dolf Gielen, 2021. "Zero-Emission Pathway for the Global Chemical and Petrochemical Sector," Energies, MDPI, vol. 14(13), pages 1-28, June.
    8. Fernando Martins & Pedro Moura & Aníbal T. de Almeida, 2022. "The Role of Electrification in the Decarbonization of the Energy Sector in Portugal," Energies, MDPI, vol. 15(5), pages 1-35, February.
    9. Guilherme Magacho & Etienne Espagne & Antoine Godin, 2024. "Impacts of the CBAM on EU trade partners: consequences for developing countries," Climate Policy, Taylor & Francis Journals, vol. 24(2), pages 243-259, February.
    10. Franziska Mais & Thomas Bauernhansl, 2024. "Decarbonization Drivers and Their Impact on Business Models in the Energy-Intensive Manufacturing Industry (EIMI)," Sustainability, MDPI, vol. 16(11), pages 1-24, June.
    11. Abhinav Bhaskar & Mohsen Assadi & Homam Nikpey Somehsaraei, 2020. "Decarbonization of the Iron and Steel Industry with Direct Reduction of Iron Ore with Green Hydrogen," Energies, MDPI, vol. 13(3), pages 1-23, February.
    12. Konstantinos Koasidis & Alexandros Nikas & Hera Neofytou & Anastasios Karamaneas & Ajay Gambhir & Jakob Wachsmuth & Haris Doukas, 2020. "The UK and German Low-Carbon Industry Transitions from a Sectoral Innovation and System Failures Perspective," Energies, MDPI, vol. 13(19), pages 1-34, September.
    13. Anissa Nurdiawati & Frauke Urban, 2021. "Towards Deep Decarbonisation of Energy-Intensive Industries: A Review of Current Status, Technologies and Policies," Energies, MDPI, vol. 14(9), pages 1-33, April.
    14. Michele Preziosi & Alessandro Federici & Roberto Merli, 2022. "Evaluating the Impact of Public Information and Training Campaigns to Improve Energy Efficiency: Findings from the Italian Industry," Energies, MDPI, vol. 15(5), pages 1-14, March.
    15. Magdalena Wójcik-Jurkiewicz & Marzena Czarnecka & Grzegorz Kinelski & Beata Sadowska & Katarzyna Bilińska-Reformat, 2021. "Determinants of Decarbonisation in the Transformation of the Energy Sector: The Case of Poland," Energies, MDPI, vol. 14(5), pages 1-22, February.
    16. Skoczkowski, Tadeusz & Verdolini, Elena & Bielecki, Sławomir & Kochański, Max & Korczak, Katarzyna & Węglarz, Arkadiusz, 2020. "Technology innovation system analysis of decarbonisation options in the EU steel industry," Energy, Elsevier, vol. 212(C).
    17. Maja Hoffmann & Clive L. Spash, 2021. "The impacts of climate change mitigation on work for the Austrian economy," SRE-Disc sre-disc-2021_10, Institute for Multilevel Governance and Development, Department of Socioeconomics, Vienna University of Economics and Business.
    18. Sri Indah Nikensari & Ega Nurdiyanto & Wong Sing Yun & Siti Fatimah Zahra, 2024. "Sustainable Exports to the European Union from ASEAN Countries: Is There an Impact of Low Carbon Economy?," International Journal of Energy Economics and Policy, Econjournals, vol. 14(4), pages 616-623, July.
    19. Shao, Tianming & Pan, Xunzhang & Li, Xiang & Zhou, Sheng & Zhang, Shu & Chen, Wenying, 2022. "China's industrial decarbonization in the context of carbon neutrality: A sub-sectoral analysis based on integrated modelling," Renewable and Sustainable Energy Reviews, Elsevier, vol. 170(C).
    20. Oscar Svensson & Jamil Khan & Roger Hildingsson, 2020. "Studying Industrial Decarbonisation: Developing an Interdisciplinary Understanding of the Conditions for Transformation in Energy-Intensive Natural Resource-Based Industry," Sustainability, MDPI, vol. 12(5), pages 1-21, March.
    21. Andersson, Fredrik N. G., 2021. "A Scenario Analysis of the Potential Effects of Decarbonization on the Profitability of the Energy-Intensive and Natural-Resource-Based Industries," Working Papers 2021:18, Lund University, Department of Economics.
    22. Maamoun, Nada & Kennedy, Ryan & Jin, Xiaomeng & Urpelainen, Johannes, 2020. "Identifying coal-fired power plants for early retirement," Renewable and Sustainable Energy Reviews, Elsevier, vol. 126(C).

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