Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/305393 
Year of Publication: 
2024
Series/Report no.: 
NBB Working Paper No. 454
Publisher: 
National Bank of Belgium, Brussels
Abstract: 
This paper provides a first estimate of the potential greenhouse gas mitigation from the intra-sector reallocation of economic activity by the European manufacturing industry away from carbon-inefficient - or "brown zombie" - firms to more carbon-efficient firms. Using techniques from the literature on productivity, we find a potential reduction of 38% based on a limited reallocation of production, without the need for new technologies. Therefore, when designing emission reduction plans, policymakers should not focus solely on improvements and innovation within existing firms but must also encourage the reallocation of economic activity from "brown zombies" to more carbon-efficient enterprises.
Subjects: 
climate policy
carbon emission reduction
carbon-intensive industries
reallocation
brown zombies
JEL: 
D22
L23
L52
L60
O14
Q58
Document Type: 
Working Paper

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