At in our homes and renewables projects”. This

At this point, therefore,
is particularly interesting to have empirical evidence of the results achieved
so far by the two countries that the literature takes as examples of the two
pure models of capitalism: the UK for liberal market economies and Germany for
coordinated market economies.

 

Tab. 1 “Change in carbon intensity 2015-2016” Source: PwC
UK

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The graph shows
the change in carbon intensity for the year 2015-2016 and it reveals that the
UK is outperforming in reducing carbon intensity by 7.7%, compared to Germany
that shows a rate of 6.6%1.
This is directly related to major investments in low-carbon technologies and
the stability of its services sectors. On the achievement of the UK, Jonathan
Grant, Director of Climate Change and LCEI (Low Carbon Economy Index) co-author
at PwC, observed: “A number of factors have contributed to the low carbon
transition in the UK, including cross-party support for tackling climate
change, support for energy efficiency in our homes and renewables projects”.
This demonstrates the fact that cooperation can be achieved also in liberal
economies and if it follows a comparative advantage in radical innovation, it’s
guaranteed to boost ratings.

While, the
German transition process remains in great difficulty. In Germany and many
other European countries, they finance promising but not yet profitable technologies
to which investors seem to be not fully interested. Yet, the closure of
coal-fired power stations is hardly mentioned in the country, also considering
the obstacle of trade unions in the sector that, between power plants and the
mining sector, deal with thousand workers’ interests.

In fact, the
reality is that a multitude of actors in the world economic system, consumers,
producers and workers of many industries and above all politicians, have a very
strong short-term interest in maintaining the energy status quo. Taking politics
into account, for example, just thinking about how current energy system ensures
a major amount of taxes for the State, and a constant flow of energy at a
relatively low cost to voters.

 For this reason, too, changing the system is
very difficult: sometimes for countries it is preferable to extend the life of
the old system, than risking a change that will give only medium-long term
perceptible benefits.

1 PwC research, September 12, 2017