Quotation Cahen-Fourot, Louison, Campiglio, Emanuele, Godin, Antoine, Kemp-Benedict, Eric, Trsek, Stefan. 2021. Capital stranding cascades: The impact of decarbonisation on productive asset utilisation. Energy Economics. 103


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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).

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Publication's profile

Status of publication Published
Affiliation WU
Type of publication Journal article
Journal Energy Economics
Citation Index SSCI
WU Journalrating 2009 A
WU-Journal-Rating new FIN-A, STRAT-B, VW-B, WH-B
Language English
Title Capital stranding cascades: The impact of decarbonisation on productive asset utilisation
Volume 103
Year 2021
Reviewed? Y
URL https://api.elsevier.com/content/article/PII:S0140988321004515?httpAccept=text/xml
DOI http://dx.doi.org/10.1016/j.eneco.2021.105581
Open Access Y
Open Access Link https://www.sciencedirect.com/science/article/pii/S0140988321004515?via%3Dihub#d1e3483

Associations

People
Cahen-Fourot, Louison (Details)
Campiglio, Emanuele (Details)
Trsek, Stefan (Details)
External
Godin, Antoine (French Development Agency, France)
Kemp-Benedict, Eric (Stockholm Environment Institute (SEI), United States/USA)
Organization
Institute for Ecological Economics IN (Details)
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