Stranded economies? Green transition opportunities for brown industries

The transition away from a polluting, fossil-fuel powered economy towards a cleaner production system will create winners and losers in the global trade system. We compile a list of traded products whose use is bound to decline if we are to mitigate climate change, and highlight which countries are most at risk of seeing their productive capabilities "stranded". Using methods from economic geography and complexity, we then show that countries exporting a high number of brown products, especially technologically sophisticated ones, may find it relatively easy to transition. Conversely, those relying on few, low-complexity brown products for a large percentage of export volume face a dearth of nearby diversification opportunities. Our results suggest that export complexity and diversity play a key role in mitigating transition risk.

About the speaker

Pia Andres is a PhD Candidate in Environmental Economics at LSE and a Researcher at the Future of Work Programme at the Oxford Martin School. In her doctoral research, she studies how the transition away from high-carbon, polluting technologies shapes countries’ competitive advantage in international trade and how it is in turn affected by trade tensions arising from concerns over the former, as well as broader technological developments such as advances in artificial intelligence. More generally, her goal as a researcher is to better understand how we can direct and leverage technological change to benefit the greater good.