Decarbonising national growth models: derisking, ‘hobbled states’, and the decarbonisation possibility frontier

This article brings together Growth Model Theory and climate change under the assumption that economic growth will remain a policy priority during the green transition. The relevant research question from a Growth Model perspective thus becomes ‘how easy or difficult is it for specific Growth Models to switch from carbon-based growth to green growth?’ In answering this question, the article makes two main contributions. The first contribution is diagnostic and asks which states are best able to decarbonise given their underlying growth model type. It introduces a simple framework that clarifies the variation in decarbonisation capacity across national growth models using a macro comparison that combines a state’s cost of capital with the share of primary energy consumption from fossil fuels in its energy mix. The second contribution uses country case studies of Germany, Sweden, the United Kingdom, France, and Poland to build upon recent scholarship that questions the capacity of different agents to affect the green transition. While many agree that the ‘Big Green State’ is the most effective actor to decarbonise, and might be right, what if a state, despite being big in terms of size and green in terms of ambition, is not very good at decarbonising?