Cluster Analysis of the Transition to Climate Neutrality in the European Union

ABSTRACT The transition to climate neutrality is an important objective for the European Union, which is increasingly affected economically and environmentally by the impacts of climate change. The primary objective of this study is to analyze the transition to climate neutrality across EU Member States through a cluster analysis approach. Specifically, the research aims to: (1) review existing literature on environmental policy outcomes in achieving climate neutrality, (2) identify key energy and environmental economic drivers impacting this transition, (3) conduct a cluster analysis to group Member States based on their progress and challenges, and (4) propose differentiated public policy recommendations to support Europe's transition to climate neutrality. To achieve these objectives, the K‐means clustering method and ranking techniques were employed to identify differences in transition policies and to evaluate disparities among clusters in their contribution to the EU's overall climate neutrality goals. The study's results determined differences in the cluster structure of the European Union in terms of the approach to the transition to climate neutrality. They will provide a basis for developing differentiated public policy proposals between countries. The results are useful for supranational policymakers in determining approaches for adjusting climate neutrality transition strategies at the EU and individual levels.