The be finally deduced from the behavior of

The prospect of
a potential low-carbon scenario can be finally deduced from the behavior of the
most important players in the political-institutional structures of the two
models.

 

In fact, the
accomplishment of such an economy, subject to the constraint of burdensome
barriers, such as the global competitiveness on production costs, is also
conditioned by the need for major transformations, both in the political administration
and in the cultural models that guide individual customs. In these areas,
efforts are being made to envisage the evolution of the economy, aimed at
understanding the inhibitory feedbacks, induced by consolidated individual
behaviors, which hinder the action of technical decision-making apparatus.

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Innovation and
development of technologies are key elements of the transition towards a low-carbon
economy and further its progress, however they need a solid socio-political
context which will support them.

Indeed, the
low-carbon transformation is not automatic. It’s a choice. The choices made by
governments and those involved in the development have a huge impact on the
transition. In order to get to a low-carbon economy model, which could also be
social and economic feasible, policies must be comprehensive. An integrated and
long-term oriented approach is in fact needed for the low-carbon economy
sustainability of the future. That is why, in this last section, will be
analyzed the significance of a long-term perspective, planning and key
economic-political actors.

 

In order to
ensure the transition, the adopted policy measures will be more effective as
they will be integrated into a medium-long term vision, consistent with the
objectives set. Within a long-term vision, the policy maker will be able to
better evaluate the opportunity to adopt ambitious measures to guide the
evolution of the transition (for instance incentive / disincentive plans or
plans for the phasing out of certain technologies) capable of anticipating and
amplifying the range of benefits that can be activated for the economy itself
and the society. At the same time, the coordination and homogeneity of policies
is necessary, not just sufficient. This would be possible by providing the
appropriate tools and coordinating different actors for the development and
implementation of policies that are innovative and consistent with the
evolution of the transition schemes.

The political
and social alignment is additionally an imperative condition for investors. In
fact, investors are leaning towards a visibility on the future. They need to
recognize countries’ targets, how they can contribute and how they can benefit
from investments in a low-carbon economy. Therefore, investors require
stability of policies and clarity on the visibility of the final target.

 

Drawing from the
VoC framework, from a political-institutional organization point of view,
Coordinated Market Economies seem to have a comparative advantage since they
meet the coordination requirements, necessary to implement a low-carbon
economy. Indeed, according to Soskice and Hall (2001), in coordinated market
contexts, companies depend intensely on relationships that are not market-based
to coordinate their efforts with other socio-economic and political actors.
While, in liberal market economies, companies coordinate their activities on
the basis of hierarchies and factors architectures typical of a competitive
market. Obviously, the strong reliance on the market, of liberal economies,
partly contrasts the vision of stability that guarantees the transition.
However, according to Geels (2002), drawing from the ‘Appreciative theory’ of
transition, (Nelson and Winter, 1982), a structure with little hierarchy can be
problematic for policymakers who have set priorities on environmental issues.
Indeed, hierarchies are useful for the pursuit of imminent political
priorities.

 

Furthermore,
LMEs and CMEs also differ in terms of electoral politics. Specifically, liberal
market economies tend to depoliticize social policies, such as the
energy/climate policy, instead of seeking a clear political agreement. This
represents a more sustainable process under transition pressures. While,
coordinated market economies are mostly characterized by multi-party systems
accompanied by institutions aimed at information exchange, behavior monitoring
and bad behavior sanctioning, such as trade unions. This implies that in CMEs,
where trade unions and coalitions have a remarkable influence on government’s
choices, in order to protect interests of the heavy industry workers, the
decision-making process is longer and complex.

Indeed, these
coalitions could obstacle such a shift towards this new economic paradigm,
since at least at the beginning of the transition, this would mean the loss of thousands
of jobs related to economies based on heavy industry, as for definition it is
that of CMEs. Therefore, the apparent strength of cooperation in coordinated
economies can actually turn in an obstacle in this context. However, a
low-carbon economy could benefit from the absence of a fragmented context of
interests and the presence of hierarchies pushing for a shift, encountering in
LMEs more favourable conditions.

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