I) able to remain for long on



A transition towards a progressively more sustainable future, with decreasing greenhouse gas emissions and the recovery of environmental degradation, requires a different economy, namely more environmentally friendly production, processes and technologies and a different concept of welfare, associated with new criteria through which firms can evaluate the added value they produce as a function of the whole wealth and not just the flow of revenues and the number of accumulated machines and infrastructures. The vector of this absolutely needed transformation is the low-carbon economy which, although declined according to different sectoral meanings and scaled to the levels of development of various nations and their vocations, gathers all the effort currently ongoing in the world towards sustainable development. Notwithstanding, the low-carbon economy involves a new vision of problems and dynamics of development, new cultures, different skills and training methods and that is what makes the transition very intricate. Indeed,  this transition determines the formation of new sectors (low-carbon sectors), new types of job (green jobs) and new technologies (green technologies).

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Accordingly, the technical and economic feasibility of this challenge will depend not only on the real conviction for the cause but also on the different development perspectives, public policies and risks that will take place on the road of change. This will require a structural transformation of society, a new consciousness, a revolutionary order.


Liberal and coordinated economies, as we know them from the theory, will not be able to move towards a low-carbon path if traditional industries do not reinvent themselves through new ways of organizing or through new forms of innovation that lead to products that are less energetic in their use; even if this innovation is triggered by considerations of cost or competitiveness rather than genuine environmental concerns. However, without environmental interests and without an adequate vision of their future, no one would be able to remain for long on a coherent transition path towards a different and sustainable type of economy. It is, indeed, in terms of long-term perspectives that the political-institutional context assumes an important function. Hence, a transition with deep meanings, which goes far beyond the narrow energy and economic boundaries, leads to ethical and social contexts.

Basically, the possible success in the long-term will require continuous innovation, new skills, different collaborations, investments with uncertain returns and a change in what are today’s market values.

In recent years, many have been the temporal hypotheses linked to scenarios of a transition of this magnitude. One of these is represented by the interesting study by Benjamin K. Sovacool (2016) entitled “How long will it take? Conceptualizing the temporal dynamics of energy transitions”, according to which the new energy and economic revolution can be completed within a fraction of the time that was necessary for previous revolutions. However, he asserts, in order to get there “it would take an interdisciplinary collaboration, a multi-scale effort”. He argues that the transition towards a low-carbon economy may be different than the past transitions given resource scarcity, the threat of climate change and the greatly improved technological knowledge and innovation which could greatly accelerate the global change for a cleaner economic future.

It is with these premises that innovation, financing and the political-institutional context. have been identified as main drivers of a low-carbon transition. In the next sections, they will be analyzed in relation to LMEs and CMEs settings, as defined by the literature, to examine whether there is a chance for the emergence of a low-carbon economy in these two models of capitalism.



II)            Innovation


According to Aldo Bonomi’s holistic view (2015), “Low-carbon economy means reasoning around the ways in which the model of capitalist development incorporates the sense of ‘limit’ (environmental, social, productive), as a new principle of accumulation, making it the engine of a new cycle. It appears as a paradigm that invests productive processes, products, regulatory policies, lifestyles, artistic representations, (re)use of the territory, smart cities, smart lands”, (Il Sole 24 Ore, 30th of April 2014). The sense of the limit, identified as the new principle of accumulation, offers a new interpretation to the low-carbon economy, whose efficient achievement is only possible by modifying in depth not only the production processes and products, but also the organization of the industrial and territorial supply chains.

In fact, the transition towards a low-carbon economy is a complex process that not only represents the transition from a traditional economy to a greener one but it presupposes a radical change in the structure, culture and practices that characterize the society. It is a transversal challenge as well as an opportunity of growth for countries. Indeed, the adjective ‘radical’ becomes a necessary requirement, since the low-carbon economy is a constantly moving construction site in which the traditional economy is transformed, bringing with it a profound change in the structure of society and in its culture. Therefore, innovations seems to be the first driving factor for the development of a low-carbon economy and, in this context, we talk about the so-called ‘eco-innovations’. Indeed, a decarbonized economy can only be achieved through the development and implementation of those eco-innovations; ie. those types of innovation which take into account not only the economic profile, but also the social and environmental dimensions as essential components of sustainable development. The objective of an eco-innovation is properly that of a radical change towards new production and consumption systems based on a sustainable supply and use of resources and a reduction/elimination of emissions and consequent impacts, which gradually leads to the absolute decoupling between growth, use of resources and impacts on ecosystems. That implies that incremental improvements alone are not sufficient for the purpose in this circumstance. However, the path towards sustainability requires the shift from incremental innovations to radical innovations that have broad systemic effects and persist as the only approach to solve environmental problems.

Therefore, it can be deduced that the low-carbon transition emphasizes the difference between incremental and radical innovation, where the latter seems to be more relevant; even better if accompanied by a risk-taking attitude which is essential to produce radically innovative strategies.

Combining this feature to the VoC framework, Soskice and Hall (2001) differentiate the two models of capitalism based on the innovation sector which, in a low-carbon perspective, is identified as one of the predominant factors in the determination of a comparative advantage.

In line with its nature, the radical innovation concerns a shift in the technological regime of an economy and leads to changes in the enabling technologies. This type of innovation is competence-destroying (Casper, 2010) and needs some kind of deregulation. Deregulation is usually particular characteristic of liberal economies that exploit it as a method to improve their level of coordination (Schmidt and Thatcher, 2013) . In accordance with the VoC framework (2001), LMEs are known to be pioneers in areas where innovations are more important and where firms’ mergers and acquisitions are widespread and necessary practices. These are also sectors in which the taking of a business risk plays a more decisive role in favor of producing innovative strategies that can attract the attention of the market.

In contrast, while CMEs enjoy organizational models based on large companies and structured networks with policies specifically aimed at supporting innovation, however they are specialized in sectors in which the incremental innovation is more diffuse. Thus, in the case of coordinated market economies, innovation is usually continue, aimed at introducing improvements to existing processes and services, without fundamentally changing the underlying key technologies (Dicken, 2003). In fact, it mainly takes place in traditional industrial fields, such as machinery and chemical sectors, which are in opposition to the rise of a greener economy.

In conclusion, the innovation is a prerogative for the emergence of a low-carbon economy which requires a total disruption of production processes and the introduction of both radically innovative products and radically innovative strategies. Therefore, starting from this assumption and integrating the VoC framework, a low-carbon economy seems to find more chances to flourish in liberal economies rather than in coordinated ones, which are distant from a radical innovation model; an indispensable feature of this transition.