Periodic Reporting for period 1 - reSET (Complex Regional Economic Systems in Sustainable Energy Transition: Theory, Models, Empirics, and Policies for Southern Europe)
Periodo di rendicontazione: 2023-10-01 al 2025-09-30
Against the backdrop of a looming global environmental crisis, a sustainable energy transition driven by public and private finance and technological innovation paves the way for the emergence of novel technologies, industries, value chains, consumption patterns, etc., under a techno-economic paradigm that promises to lead to a ‘great surge of development’ decoupled from environmental harm. The diffusion and adoption of this new paradigm, however, is too sluggish to avert ecological collapse, uncertain in view of geopolitical conflict and the impending energy crises, and highly uneven in time and space due to core-periphery disparities. In Europe, this paradigm shift creates opportunities but also major challenges for peripheral countries, underscoring the need for more assertive industrial strategies.
A dominant policy and theoretical current, embodied in the European Union’s Green Deal and related strategic frameworks, advances the paradigm of ‘green growth’—the conviction that economic growth can be rendered compatible with environmental sustainability through technological innovation, structural transformation, and coordinated public action. It conceives the transition to renewable energy and resource-efficient production not as a constraint on prosperity but as the foundation of a new techno-economic paradigm capable of reconciling growth with ecological balance. In practice, however, the EU’s green growth agenda remains strongly market-driven, relying heavily on price signals, private investment, and competitive allocation mechanisms, which results in a transition that is too slow, prone to stop-start dynamics, often ineffective, and unevenly concentrated in space. Within this paradigm, state intervention is constrained by competition rules, fiscal limits, and an implicit reliance on markets as the primary drivers of the transition.
An antithetical current, rooted in ecological economics and political ecology, under the rubric of ‘degrowth’, contends that green growth is illusory, and that genuine sustainability presupposes the deliberate contraction of economic activity. It posits that technological progress and efficiency gains are inherently incapable of decoupling production from environmental degradation at the scale required to avert ecological collapse. It advocates a managed reduction of output, a reorganisation of production systems, and a cultural shift towards sufficiency and moderated consumption. This current stands in opposition to the premise that technological innovation and economic expansion can be reconciled with environmental sustainability.
This project investigates, from a theoretical, empirical and normative perspective, Europe’s energy transition dynamics, their institutional, technological and economic determinants, their potential economic and environmental impacts, and the policies needed to avert ecological overshoot. It combines Schumpeterian, post-Keynesian and ecological economic theories within a systemic research programme, and develops a dynamic model of an economy embedded in the environment and undergoing energy transition. At the empirical level, it simulates alternative transition scenarios, including those of green growth and degrowth. At the normative level, it frames the EU and national policy discourses on the European Industrial Strategy, Recovery Plan and Green Deal with robust insights on industrial policy.
The project advances the ongoing debate between the green growth and degrowth paradigms by examining their theoretical premises and empirical validity in the context of Europe’s energy transition. It explores alternative realistic pathways to economic growth that remain within ecological limits, assessing whether technological change and policy intervention can achieve decoupling without precipitating ecological overshoot. In doing so, it provides valuable insights for policy design, clarifying the conditions under which industrial policy can reconcile development objectives with environmental sustainability. It highlights the limits of market-driven green growth and the impasse of degrowth, and concludes that only a coherent green industrial policy—whereby the State assumes an entrepreneurial and directive role, steering strategic public investment, mission-oriented planning, and targeted support for peripheral regions—can reconcile development objectives with environmental sustainability across Europe.
The project was designed to boost the researcher’s career evolution and to consolidate his expertise and research skills through high-quality training.
A dominant policy and theoretical current, embodied in the European Union’s Green Deal and related strategic frameworks, advances the paradigm of ‘green growth’—the conviction that economic growth can be rendered compatible with environmental sustainability through technological innovation, structural transformation, and coordinated public action. It conceives the transition to renewable energy and resource-efficient production not as a constraint on prosperity but as the foundation of a new techno-economic paradigm capable of reconciling growth with ecological balance. In practice, however, the EU’s green growth agenda remains strongly market-driven, relying heavily on price signals, private investment, and competitive allocation mechanisms, which results in a transition that is too slow, prone to stop-start dynamics, often ineffective, and unevenly concentrated in space. Within this paradigm, state intervention is constrained by competition rules, fiscal limits, and an implicit reliance on markets as the primary drivers of the transition.
An antithetical current, rooted in ecological economics and political ecology, under the rubric of ‘degrowth’, contends that green growth is illusory, and that genuine sustainability presupposes the deliberate contraction of economic activity. It posits that technological progress and efficiency gains are inherently incapable of decoupling production from environmental degradation at the scale required to avert ecological collapse. It advocates a managed reduction of output, a reorganisation of production systems, and a cultural shift towards sufficiency and moderated consumption. This current stands in opposition to the premise that technological innovation and economic expansion can be reconciled with environmental sustainability.
This project investigates, from a theoretical, empirical and normative perspective, Europe’s energy transition dynamics, their institutional, technological and economic determinants, their potential economic and environmental impacts, and the policies needed to avert ecological overshoot. It combines Schumpeterian, post-Keynesian and ecological economic theories within a systemic research programme, and develops a dynamic model of an economy embedded in the environment and undergoing energy transition. At the empirical level, it simulates alternative transition scenarios, including those of green growth and degrowth. At the normative level, it frames the EU and national policy discourses on the European Industrial Strategy, Recovery Plan and Green Deal with robust insights on industrial policy.
The project advances the ongoing debate between the green growth and degrowth paradigms by examining their theoretical premises and empirical validity in the context of Europe’s energy transition. It explores alternative realistic pathways to economic growth that remain within ecological limits, assessing whether technological change and policy intervention can achieve decoupling without precipitating ecological overshoot. In doing so, it provides valuable insights for policy design, clarifying the conditions under which industrial policy can reconcile development objectives with environmental sustainability. It highlights the limits of market-driven green growth and the impasse of degrowth, and concludes that only a coherent green industrial policy—whereby the State assumes an entrepreneurial and directive role, steering strategic public investment, mission-oriented planning, and targeted support for peripheral regions—can reconcile development objectives with environmental sustainability across Europe.
The project was designed to boost the researcher’s career evolution and to consolidate his expertise and research skills through high-quality training.
The project developed an epistemologically pluralist and systemic theoretical framework grounded in Schumpeterian, post-Keynesian, and ecological economics, further enriched by insights from industrial ecology, econophysics, and complex systems science. Within this framework, it constructed a system dynamics model of the economy as a complex adaptive system composed of co-evolving energy, industrial, innovation, and financial subsystems embedded in a biophysical environment. This model provided the analytical foundation for examining the macroeconomic, technological, and environmental dynamics of energy transition under different “states of the world.”
The project developed a multidimensional typology of economies based on the characteristics of their energy, industrial, innovation, and financial subsystems; their positioning in global value chains; their governance modes and policy regimes; and their material and energy footprints and ecological resilience. Using this typology, it simulated the effects of the energy transition on growth, employment, productivity, technological convergence, and environmental performance, employing the formal model.
Finally, the project derived normative insights relevant to the design of European industrial policy strategies for sustainable energy transition with growth. It identified and classified existing sectoral, regional, and horizontal policy instruments and industrial-policy regimes across Europe, and formulated a framework for strategic industrial policy aimed at achieving ecological-economic decoupling while promoting techno-economic convergence.
The project developed a multidimensional typology of economies based on the characteristics of their energy, industrial, innovation, and financial subsystems; their positioning in global value chains; their governance modes and policy regimes; and their material and energy footprints and ecological resilience. Using this typology, it simulated the effects of the energy transition on growth, employment, productivity, technological convergence, and environmental performance, employing the formal model.
Finally, the project derived normative insights relevant to the design of European industrial policy strategies for sustainable energy transition with growth. It identified and classified existing sectoral, regional, and horizontal policy instruments and industrial-policy regimes across Europe, and formulated a framework for strategic industrial policy aimed at achieving ecological-economic decoupling while promoting techno-economic convergence.
The project builds a systemic theoretical framework that departs radically from the neoclassical paradigm: The neoclassical framework is inherently ill-suited for the study of non-equilibrium processes of structural change, such as energy transitions. The alternative systemic framework, put forward by this project, views the economy as a multi-layered complex adaptive system (CAS) of interacting, heterogeneous individual and collective agents (including states and organisations), structured into co-evolving energy, industrial, financial and innovation subsystems (which are also CAS by themselves), and regulated by socio-political institutions. This CAS is open and dissipative, in constant exchange of energy and matter with its biophysical milieu, and exhibits non-linear, out-of-equilibrium dynamics or transitional dynamic equilibria, instead of static Walrasian ones.
The project espouses strong sustainability, while refuting neo-Malthusian and neo-Luddite biases and entropy pessimism: Contrary to the neoclassical construal of the environment as a marketable, fungible, capital-like stock that forms part of a self-contained economy, this project views the economy as a human ecosystem embedded in, constrained by, co-evolving with, and hence constituting a subsystem of the planetary ecosystem, and, by extension, it espouses the strong sustainability premise and the associated idea that economic systems are subject to external biophysical constraints. Yet it scrutinises the anti-growth and anti-technology theses that emanate from entropy pessimism and pervade the sustainability discourse, and in particular the position that ecological-economic decoupling is unattainable. It also critically reviews the theses of policy-induced degrowth and eco-austerity and their socio-economic implications, and examines to what extent directed technological change and eco-innovation may lead to sustainable growth.
The project explores the impact of sustainable energy transition on the core-periphery divide (and vice versa): Economic geographers have approached the issue of sustainability transition mostly in its urban dimension and from the perspective of core industrial economies. This project study the regional and national dimensions of the energy transition dynamics and explore their bidirectional relation to the core-periphery techno-economic divide.
Finally, this project challenges established and puts forward new approaches to industrial policy for the periphery: It holds the view that the unfolding techno-economic paradigm shift opens a window of opportunity for peripheral economies to build resilient and sustainable energy, industrial and innovation systems, and to forge their own techno-industrial niches in the emerging value chains. In this context, it also challenges the established view that peripheral economies should adopt (quasi-)industrial policies that conform to their existing comparative advantage, merely address market failures, and emulate the transition path of core economies in a perpetual struggle to catch up; it makes the case for technological leapfrogging and ‘tunnelling through the environmental Kuznets curve’ by employing comprehensive, mission-oriented industrial strategies that dare to defy comparative advantage.
The project espouses strong sustainability, while refuting neo-Malthusian and neo-Luddite biases and entropy pessimism: Contrary to the neoclassical construal of the environment as a marketable, fungible, capital-like stock that forms part of a self-contained economy, this project views the economy as a human ecosystem embedded in, constrained by, co-evolving with, and hence constituting a subsystem of the planetary ecosystem, and, by extension, it espouses the strong sustainability premise and the associated idea that economic systems are subject to external biophysical constraints. Yet it scrutinises the anti-growth and anti-technology theses that emanate from entropy pessimism and pervade the sustainability discourse, and in particular the position that ecological-economic decoupling is unattainable. It also critically reviews the theses of policy-induced degrowth and eco-austerity and their socio-economic implications, and examines to what extent directed technological change and eco-innovation may lead to sustainable growth.
The project explores the impact of sustainable energy transition on the core-periphery divide (and vice versa): Economic geographers have approached the issue of sustainability transition mostly in its urban dimension and from the perspective of core industrial economies. This project study the regional and national dimensions of the energy transition dynamics and explore their bidirectional relation to the core-periphery techno-economic divide.
Finally, this project challenges established and puts forward new approaches to industrial policy for the periphery: It holds the view that the unfolding techno-economic paradigm shift opens a window of opportunity for peripheral economies to build resilient and sustainable energy, industrial and innovation systems, and to forge their own techno-industrial niches in the emerging value chains. In this context, it also challenges the established view that peripheral economies should adopt (quasi-)industrial policies that conform to their existing comparative advantage, merely address market failures, and emulate the transition path of core economies in a perpetual struggle to catch up; it makes the case for technological leapfrogging and ‘tunnelling through the environmental Kuznets curve’ by employing comprehensive, mission-oriented industrial strategies that dare to defy comparative advantage.