Abstract
Keeping global mean temperature rise well below 2 °C requires deep emission reductions in all industrial sectors, but several barriers inhibit such transitions. A special type of barrier is carbon lock-in, defined as a process whereby various forms of increasing returns to adoption inhibit innovation and the competitiveness of low-carbon alternatives, resulting in further path dependency. Here, we explore potential carbon lock-in in the Dutch chemical industry via semi-structured interviews with eleven key actors. We find that carbon lock-in may be the result of (i) technological incompatibility between deep emission reduction options over time, (ii) system integration in chemical clusters, (iii) increasing sunk costs as firms continue to invest in incremental improvements in incumbent installations, (iv) governmental policy inconsistency between targets for energy efficiency and deep emission reductions, and (v) existing safety routines and standards. We also identify barriers that do not have the self-reinforcing character of lock-in, but do inhibit deep emission reductions. Examples include high operating costs of low-carbon options and low risk acceptance by capital providers and shareholders. Rooted in the Dutch policy setting, we discuss policy responses for avoiding carbon lock-in and overcoming barriers based on the interviews, such as transition plans for individual industries and infrastructure subsidies.
Highlights
Keeping global warming below 2 °C requires a 85–90% reduction in global greenhouse gas (GHG) emission between 2015 and 2050 [1] and the 1.5 °C limit in the Paris Agreement even requires global CO2-neutrality in 2050 [2]
We hypothesise in this paper that, in addition to general barriers, the Dutch chemical industry (DCI) is at risk of carbon lock-in, given its existing path-dependent, highly optimised and integrated system that has exhibited strong increasing returns to past adoption
Failing to deal with carbon lockin in a timely and adequate manner makes a low-carbon transition even more difficult or economically unsustainable for the DCI in the long run. We investigate whether such potential carbon lock-in exists for the DCI, and if so, what are the components of such a potential carbon lock-in and what could be possible policy responses
Summary
Keeping global warming below 2 °C requires a 85–90% reduction in global greenhouse gas (GHG) emission between 2015 and 2050 [1] and the 1.5 °C limit in the Paris Agreement even requires global CO2-neutrality in 2050 [2]. To these studies, a combination of various DER measures is required, including novel technologies related to radical options Those DER options are categorised by IPCC [2] as well as the Dutch Ministry for Economic Affairs and Climate Policy [17] as full electrification and hydrogen, circularity and substitution, bio-based, carbon dioxide capture, utilisation and storage (CCS/CCU), and process and energy efficiency, where the latter one is not considered DER unless combined with one of the other categories. We hypothesise in this paper that, in addition to general barriers, the DCI is at risk of carbon lock-in, given its existing path-dependent, highly optimised and integrated system that has exhibited strong increasing returns to past adoption.
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