IDEAS home Printed from https://ideas.repec.org/a/spr/anresc/v74y2025i1d10.1007_s00168-024-01343-5.html
   My bibliography  Save this article

The EU’s comparative advantage in the “clean-energy arms race”

Author

Listed:
  • Petter Dahlström

    (Royal Institute of Technology)

  • Hans Lööf

    (Royal Institute of Technology)

  • Fredrik Sjöholm

    (Research Institute of Industrial Economics)

  • Andreas Stephan

    (Linnaeus University)

Abstract

The net-zero agreement on carbon emission from Paris 2015 gives a key role to fossil-free energy technologies with an expected multiple growth rate over the coming decades, when successively replacing oil, coal, and gas. In this paper, we examine the EU’s comparative advantage in the evolving trade war in clean-energy and show that the EU excels in developing strategic net-zero technologies, but often falls short in manufacturing the final products. The EU’s Net-Zero Industry Act aims to encourage investments in the production of strategic energy products and increase self-sufficiency to meet 40% of low-carbon technology needs by 2030. However, this may not fully address long-term challenges relating to growth, job creation, decarbonization, and geopolitical resilience. Supporting innovative producers could be a more effective policy to capitalize on the EU’s competitive advantage in the clean- energy sector.

Suggested Citation

  • Petter Dahlström & Hans Lööf & Fredrik Sjöholm & Andreas Stephan, 2025. "The EU’s comparative advantage in the “clean-energy arms race”," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 74(1), pages 1-18, March.
    • Handle: RePEc:spr:anresc:v:74:y:2025:i:1:d:10.1007_s00168-024-01343-5
    DOI: 10.1007/s00168-024-01343-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s00168-024-01343-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s00168-024-01343-5?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Daron Acemoglu & Philippe Aghion & Leonardo Bursztyn & David Hemous, 2012. "The Environment and Directed Technical Change," American Economic Review, American Economic Association, vol. 102(1), pages 131-166, February.
    2. Rodrik, Dani, 2004. "Industrial Policy for the Twenty-First Century," CEPR Discussion Papers 4767, C.E.P.R. Discussion Papers.
    3. Jeromin Zettelmeyer, 2019. "The Return of Economic Nationalism in Germany," Policy Briefs PB19-4, Peterson Institute for International Economics.
    4. David Popp, 2019. "Environmental Policy and Innovation: A Decade of Research," NBER Working Papers 25631, National Bureau of Economic Research, Inc.
    5. Philippe Aghion & Xavier Jaravel, 2015. "Knowledge Spillovers, Innovation and Growth," Economic Journal, Royal Economic Society, vol. 0(583), pages 533-573, March.
    6. David Popp, 2019. "Environmental policy and innovation: a decade of research," CESifo Working Paper Series 7544, CESifo.
    7. Reyer Gerlagh & Snorre Kverndokk & Knut Rosendahl, 2009. "Optimal Timing of Climate Change Policy: Interaction Between Carbon Taxes and Innovation Externalities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(3), pages 369-390, July.
    8. Popp, David, 2019. "Environmental Policy and Innovation: A Decade of Research," International Review of Environmental and Resource Economics, now publishers, vol. 13(3-4), pages 265-337, September.
    9. Hong Cheng & Hanbing Fan & Takeo Hoshi & Dezhuang Hu, 2019. "Do Innovation Subsidies Make Chinese Firms More Innovative? Evidence from the China Employer Employee Survey," NBER Working Papers 25432, National Bureau of Economic Research, Inc.
    10. Adam Jaffe & Richard Newell & Robert Stavins, 2002. "Environmental Policy and Technological Change," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 22(1), pages 41-70, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Dahlström, Petter & Lööf, Hans & Sjöholm, Fredrik & Stephan, Andreas, 2023. "The EU’s competitive advantage in the "clean-energy arms race"," Working Paper Series in Economics and Institutions of Innovation 495, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
    2. Johan Lilliestam & Anthony Patt & Germán Bersalli, 2022. "On the quality of emission reductions: observed effects of carbon pricing on investments, innovation, and operational shifts. A response to van den Bergh and Savin (2021)," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 83(3), pages 733-758, November.
    3. Stern, Nicholas & Sivropoulos-Valero, Anna Valero, 2021. "Innovation, growth and the transition to net-zero emissions," LSE Research Online Documents on Economics 114385, London School of Economics and Political Science, LSE Library.
    4. Nicholas Stern & Anna Valero, 2021. "Innovation, growth and the transition to net-zero emissions," CEP Discussion Papers dp1773, Centre for Economic Performance, LSE.
    5. Katinka Holtsmark & Katinka Kristine Holtsmark, 2024. "Can Revenue Recycling Kill Green Technology?," CESifo Working Paper Series 11510, CESifo.
    6. Ahlvik, Lassi & van den Bijgaart, Inge, 2024. "Screening green innovation through carbon pricing," Journal of Environmental Economics and Management, Elsevier, vol. 124(C).
    7. Campiglio, Emanuele & Dietz, Simon & Venmans, Frank, 2022. "Optimal climate policy as if the transition matters," LSE Research Online Documents on Economics 117609, London School of Economics and Political Science, LSE Library.
    8. Edwin van der Werf & Herman R. J. Vollebergh & Johanna Vogel, 2021. "Designing Instrument Packages for the Low-Carbon Transition: An Evaluation Framework with an Application to Austria," CESifo Working Paper Series 9192, CESifo.
    9. Stern, Nicholas & Valero, Anna, 2021. "Innovation, growth and the transition to net-zero emissions," Research Policy, Elsevier, vol. 50(9).
    10. Cui, Yi & Du, Xiaodong & Ma, Jiujie, 2020. "Agricultural Water right reforms and Irrigation Water Demand: A Quasi-Natural Experiment in China," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304364, Agricultural and Applied Economics Association.
    11. Zhu, Zhishuang & Liao, Hua & Liu, Li, 2021. "The role of public energy R&D in energy conservation and transition: Experiences from IEA countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
    12. Nicholas Stern & Anna Valero, 2021. "Innovation, growth and the transition to net-zero emissions," POID Working Papers 008, Centre for Economic Performance, LSE.
    13. Michael Peneder & Spyros Arvanitis & Christian Rammer & Tobias Stucki & Martin Wörter, 2022. "Policy instruments and self-reported impacts of the adoption of energy saving technologies in the DACH region," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(2), pages 369-404, May.
    14. Grafström, Jonas & Poudineh, Rahmat, 2023. "No evidence of counteracting policy effects on European solar power invention and diffusion," Energy Policy, Elsevier, vol. 172(C).
    15. Rik L. Rozendaal & Herman R. J. Vollebergh, 2021. "Policy-Induced Innovation in Clean Technologies: Evidence from the Car Market," CESifo Working Paper Series 9422, CESifo.
    16. repec:ecb:ecbdps:202219 is not listed on IDEAS
    17. Gugler, Klaus & Szücs, Florian & Wiedenhofer, Thomas, 2024. "Environmental Policies and directed technological change," Journal of Environmental Economics and Management, Elsevier, vol. 124(C).
    18. Feng, Siyu & Lazkano, Itziar, 2022. "Innovation trends in electricity storage: What drives global innovation?," Energy Policy, Elsevier, vol. 167(C).
    19. Romagnoli, Matteo, 2024. "Clean sweep: Electricity liberalization and the direction of technological change in the electricity sector," Research Policy, Elsevier, vol. 53(8).
    20. Jeroen den Bergh & Ivan Savin, 2021. "Impact of Carbon Pricing on Low-Carbon Innovation and Deep Decarbonisation: Controversies and Path Forward," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 80(4), pages 705-715, December.

    More about this item

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:anresc:v:74:y:2025:i:1:d:10.1007_s00168-024-01343-5. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.