The Policies of the Green Industrial Transition from Geopolitical Viewpoints and their Potential Implications for Geoeconomic Fragmentation. A Comparative Approach of EU, USA, and China

Abstract

The paper tackles the impact of the national economic policies designed to address the challenges related to climate change. The research hypothesis is that divergent policies have significant effects on the economy, leading to potential disruptions, economic fragmentation, and geopolitical tensions. The analysis reveals that, globally, 165 jurisdictions reported having updated the nationally determined contributions (NDCs) to reduce carbon emissions under the Paris Agreement. However, only 39 jurisdictions implemented a form of carbon emissions pricing system. The NDCs and the sectoral policies, rather than the aggregate policies (mainly, carbon taxation) seem to be the cornerstone of the climate objectives. In addition, the analysis highlights the increased endeavours to ensure open strategic autonomy and the security of global value chains and supply sources. The article concludes that, in major jurisdictions (EU, USA, and China), the green transition policies differ in terms of approach and stance. Thus, they become sources for geoeconomic fragmentation and geopolitical tensions provoked by harsh competitiveness and security concerns in the quest for strategic resources and critical minerals necessary to the green transition. Furthermore, the EU resorts to a regulatory approach, while the USA pursues a supportive fiscal stance, and China maintains the political guidance characteristic of a centralised state.