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The world is transitioning to a more sustainable and eco-friendly economy, driven by the urgency to combat climate change, resource scarcity, and pollution. With this shift comes new challenges for businesses as they move away from traditional fossil fuels towards renewable energy sources.
But what impact does this green transition have on the market and competition between companies? A research group at the URV has conducted a study to provide answers to this question and emphasized the need for immediate action in environmental policies to avoid environmental risks, company monopolies, and lack of investment during this transition.
Their study, published in the Journal of Cleaner Production, introduces a theoretical model of competition that explores three possible scenarios for the green transition.
It raises concerns about market concentration and reduced competition in the first two scenarios. It also warns of the urgency of mitigating the environmental and economic risks in these scenarios.
The transition to sustainable production systems involves high costs for the industry, but it can bring maximum overall benefit, according to the study. Although prices may rise, environmentally friendly products are increasingly preferred by consumers, leading to an increase in overall benefit.
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