Conceptualizing and achieving industrial system transition for a dematerialized and decarbonized world

Abstract

The concept of industrial system transition introduced in the IPCC special report on Global Warming of 1.5 °C remains poorly conceptualized. In this paper, we deepen the conceptualization of the industrial system transition to decarbonization, dematerialization, and sustainable industrial production. Aided by fuzzy cognitive maps that use perception-based data from stakeholders to model complex and difficult-to-model systems, we chart the pathways for industrial system transition. The industrial system transition entails interactions between dematerialization and decarbonization goals while enabling governance and systemic corporate strategies. The respondents of the fuzzy cognitive maps-based surveys comprised practitioners from companies, authors, and the policymaking community. Fuzzy cognitive map-based simulations reveal that resorting to technical measures of dematerialization and decarbonization is insufficient to accomplish industrial system transition. The efficient industrial system transition to dematerialization and decarbonization requires the combined measures of (i) dematerialization and decarbonization, (ii) governance, policies, and regulations (effective governance including transnational governance, technology push, market-pull, technology transfer and financial flows, carbon price and carbon market; and (iii) enabling corporate strategies (regenerative and conscious capitalism, a new conception of transparency, and collaborative and constructive lobbying). Large companies are mostly transnational entities, necessitating the adoption of effective transnational governance strategies for achieving the objectives of dematerialization and decarbonization. Several transnational governance networks have partnered under the public–private co-governance mechanism in the decarbonization space dominated by mainly larger players. The advent of polycentric governance provides new opportunities for trans-local governance where large numbers of small and medium enterprises can participate in the advancement of at least decarbonization objectives; however, such networks require support from national governments. Besides implications for governance, policy and regulations, the findings of this research could also have implications for corporate behavior in terms of promoting conscious and transparent organizational culture.