In this paper, Alessio Terzi draws parallels between past industrial revolutions and the green transition, advocating for proactive policies to harness technological advancements, manage economic disruptions, and mitigate inequalities to ensure a smooth and equitable transformation.
Achieving climate neutrality demands a complete overhaul of our fossil fuel-dependent economic activities, encompassing energy, agriculture, transport, and more. Through historical analysis, this paper identifies parallels between the green transition and past industrial revolutions, highlighting that such transitions have always involved significant upheavals in economic and social structures.
Despite the promising prospects of green technologies fostering economic growth and job creation, potential short-term disruptions and growing inequalities will pose significant challenges, and inevitably unleash some political economy forces. Consequently, the future economic order can be expected to be marked by: (i) activist governments, (ii) trade fragmentation, (iii) limited voluntary technological and (iv) financial transfers between countries.
Within the contours of this emerging economic framework, policy decisions can still have first order repercussions on the speed of climate action, growth, human lives and livelihoods, within and between countries. The paper concludes by articulating five broad recommendations for policymakers in rich and poor countries, designed to maximise the advantages of the green transition while mitigating its adverse impacts.
