Regional Industrial Transitions to Climate Neutrality

image of Regional Industrial Transitions to Climate Neutrality

Some manufacturing activities are among the most difficult human activities to make climate neutral and they are typically regionally concentrated. Across Europe these regions are often socioeconomically relatively weak. Yet these sectors provide relatively well-paid jobs in many of these regions. Some of these regions may also have more difficult access to infrastructure to provide the hydrogen, carbon capture and storage and zero-emission freight, which can be important to some of these activities. Industrial transitions to climate neutrality therefore have regional development implications. Since regions differ in their socio-economic conditions, understanding these regional development implications will help policy makers prepare a just transition. This publication identifies manufacturing activities that are particularly difficult to decarbonise and the transformations they require. It shows how these activities are distributed across European regions, focusing on employment at emission-intensive production locations. It identifies conditions for getting access to needed infrastructure and how access conditions differ across regions. It investigates the socio-economic vulnerabilities of affected regions, their manufacturing businesses and workers. In some regions, workers and firms may be particularly vulnerable, for example, because of low-skill jobs, type of employment contract or low productivity.


Regional industrial transitions to climate neutrality: Identifying potential socio-economic vulnerabilities

This chapter assesses the socio-economic characteristics of the regions most vulnerable to the transformations needed for the transition of key manufacturing sectors to climate neutrality. The chapter considers regional, worker and firm characteristics. These point to the specific vulnerabilities of each region and lay the basis for regional policy action for a just transition. The most vulnerable regions tend to underperform on key regional socio‑economic indicators, including gross domestic product (GDP) per capita, wages and net migration. Workers employed in the key manufacturing sectors in the most vulnerable regions often have low educational attainment, work in low-skilled occupations and tend to have temporary contracts. Some firms in these regions underperform on productivity, reinforcing challenges to incorporate new technologies and finance needed investment.



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