Publisher:
Lund University, School of Economics and Management, Department of Economics, Lund
Abstract:
The decarbonization of the energy-intensive and natural-resourced-based industries is associated with large economic costs. In this paper, I explore how decarbonization may affect the profitability and market value of these industries and their ability to attract capital to fund their decarbonization. I also discuss the possibility of compensating for the investment costs through higher prices and enhanced productivity. I answer these questions using scenario analysis with a focus on the industries in the European Union and the United States. I find that the effects on profitability are likely to be modest despite relatively high investment costs.