This article develops a novel methodological framework to investigate the exposure of eco-
nomic systems to the risk of physical capital stranding. Combining Input-Output (IO) and
network theory, we define measures to identify both the sectors likely to trigger relevant capital
stranding cascades and those most exposed to capital stranding risk. We show how, in a sample
of ten European countries, mining is among the sectors with the highest external asset strand-
ing multipliers. The sectors most affected by capital stranding triggered by decarbonisation
include electricity and gas; coke and refined petroleum products; basic metals; and transporta-
tion. From these sectors, stranding would frequently cascade down to chemicals; metal products;
motor vehicles water and waste services; wholesale and retail trade; and public administration.
Finally, we provide an estimate for the lower-bound amount of assets at risk of transition-related
stranding, which is in the range of 0.6-8.2% of the overall productive capital stock for our sample
of countries, mainly concentrated in the electricity and gas sector, manufacturing, and mining.
These results confirm the systemic relevance of transition-related risks on European societies. / Series: Ecological Economic Papers
| Identifer | oai:union.ndltd.org:VIENNA/oai:epub.wu-wien.ac.at:6854 |
| Date | 02 1900 |
| Creators | Cahen-Fourot, Louison, Campiglio, Emanuele, Dawkins, Elena, Godin, Antoine, Kemp-Benedict, Eric |
| Publisher | WU Vienna University of Economics and Business |
| Source Sets | Wirtschaftsuniversität Wien |
| Language | English |
| Detected Language | English |
| Type | Paper, NonPeerReviewed |
| Format | application/pdf |
| Relation | http://epub.wu.ac.at/6854/ |
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