The prospect ofa potential low-carbon scenario can be finally deduced from the behavior of themost important players in the political-institutional structures of the twomodels.
In fact, theaccomplishment of such an economy, subject to the constraint of burdensomebarriers, such as the global competitiveness on production costs, is alsoconditioned by the need for major transformations, both in the political administrationand in the cultural models that guide individual customs. In these areas,efforts are being made to envisage the evolution of the economy, aimed atunderstanding the inhibitory feedbacks, induced by consolidated individualbehaviors, which hinder the action of technical decision-making apparatus. Innovation anddevelopment of technologies are key elements of the transition towards a low-carboneconomy and further its progress, however they need a solid socio-politicalcontext which will support them. Indeed, thelow-carbon transformation is not automatic. It’s a choice.
The choices made bygovernments and those involved in the development have a huge impact on thetransition. In order to get to a low-carbon economy model, which could also besocial and economic feasible, policies must be comprehensive. An integrated andlong-term oriented approach is in fact needed for the low-carbon economysustainability of the future. That is why, in this last section, will beanalyzed the significance of a long-term perspective, planning and keyeconomic-political actors. In order toensure the transition, the adopted policy measures will be more effective asthey will be integrated into a medium-long term vision, consistent with theobjectives set. Within a long-term vision, the policy maker will be able tobetter evaluate the opportunity to adopt ambitious measures to guide theevolution of the transition (for instance incentive / disincentive plans orplans for the phasing out of certain technologies) capable of anticipating andamplifying the range of benefits that can be activated for the economy itselfand the society. At the same time, the coordination and homogeneity of policiesis necessary, not just sufficient.
This would be possible by providing theappropriate tools and coordinating different actors for the development andimplementation of policies that are innovative and consistent with theevolution of the transition schemes.The politicaland social alignment is additionally an imperative condition for investors. Infact, investors are leaning towards a visibility on the future. They need torecognize countries’ targets, how they can contribute and how they can benefitfrom investments in a low-carbon economy.
Therefore, investors requirestability of policies and clarity on the visibility of the final target. Drawing from theVoC framework, from a political-institutional organization point of view,Coordinated Market Economies seem to have a comparative advantage since theymeet the coordination requirements, necessary to implement a low-carboneconomy. Indeed, according to Soskice and Hall (2001), in coordinated marketcontexts, companies depend intensely on relationships that are not market-basedto coordinate their efforts with other socio-economic and political actors.While, in liberal market economies, companies coordinate their activities onthe basis of hierarchies and factors architectures typical of a competitivemarket. Obviously, the strong reliance on the market, of liberal economies,partly contrasts the vision of stability that guarantees the transition.However, according to Geels (2002), drawing from the ‘Appreciative theory’ oftransition, (Nelson and Winter, 1982), a structure with little hierarchy can beproblematic for policymakers who have set priorities on environmental issues.Indeed, hierarchies are useful for the pursuit of imminent politicalpriorities.
Furthermore,LMEs and CMEs also differ in terms of electoral politics. Specifically, liberalmarket economies tend to depoliticize social policies, such as theenergy/climate policy, instead of seeking a clear political agreement. Thisrepresents a more sustainable process under transition pressures.
While,coordinated market economies are mostly characterized by multi-party systemsaccompanied by institutions aimed at information exchange, behavior monitoringand bad behavior sanctioning, such as trade unions. This implies that in CMEs,where trade unions and coalitions have a remarkable influence on government’schoices, in order to protect interests of the heavy industry workers, thedecision-making process is longer and complex.Indeed, thesecoalitions could obstacle such a shift towards this new economic paradigm,since at least at the beginning of the transition, this would mean the loss of thousandsof jobs related to economies based on heavy industry, as for definition it isthat of CMEs. Therefore, the apparent strength of cooperation in coordinatedeconomies can actually turn in an obstacle in this context. However, alow-carbon economy could benefit from the absence of a fragmented context ofinterests and the presence of hierarchies pushing for a shift, encountering inLMEs more favourable conditions.