A Scenario Analysis of the Potential Effects of Decarbonization on the Profitability of the Energy-Intensive and Natural-Resource-Based Industries

• 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.

Subject headings

SAMHÄLLSVETENSKAP  -- Ekonomi och näringsliv -- Nationalekonomi (hsv//swe)

SOCIAL SCIENCES  -- Economics and Business -- Economics (hsv//eng)

Keyword

decarbonization

energy-intensive

industry

profitability

investment

L60

L70

Q54

Publication and Content Type

ovr (subject category)

vet (subject category)