38 Brigitte Wolkinger et al.
Another risk occurs before or during implementation of the transition
pathway, when there is no incentive for behavioural change and its contribution is not sufficiently considered or communicated. Especially when transition
pathways are mainly focused on technological changes, the contribution of
behavioural change is not incorporated into projections. To overcome this risk,
stakeholders suggest clearly communicating which parts of society are able and
willing to contribute to behavioural change and the extent of change required.
When changing behaviour (such as saving energy or producing electricity) is
associated with status, then all parts of the society could be involved. For
example, smartphones can be seen as a status symbol for all parts of society. To,
for example, show one’s power consumption and production in real time could
become a trend, and be an incentive for private investment and behavioural
change.
Cluster 5: Conditions of competition of (financial) markets
The cluster conditions of competition of (financial) markets includes mainly financial risks and the lack of planning security for investors as a prevalent implementation risk. Increasing dependence on electricity imports and international
policies (e.g. steel policy in the USA) as well as the underestimation of market
dynamics are seen as further risks within this cluster.
Lack of foresight and efficiency as the main criteria for decision and planning, as well as missing education for professions needed in future, are further
risks that may hinder transition. If politics fosters transition, there is the risk
that the intended direction will harm some sectors or companies in
unintended ways.
The risks stemming from financial markets is appraised by stakeholders ten
times higher than from the real economy. As decarbonisation is highly
dependent on financial capital, developments in financial markets are very
important for the transition. Additional risks occur for the proposed transition
pathway in the iron and steel sector. For its implementation, electricity prices
between €0.03 and €0.05/kWh, together with modest CO 2 pricing, guarantee a
cost- efficient transition as they level out unit operating expenditures of
hydrogen- based steel production with conventional carbon- intensive production (details are given in Mayer, Bachner, and Steininger, 2019). However,
these prices are uncertain at the current state. Which sectors will compete for
hydrogen produced by renewable electricity (the demand by mobility, housing,
the chemical industry, etc.) is also unclear. The potential for a hydrogen
economy exists, but emerging new dependencies and asymmetric market power
relations may have to be dealt with. For instance, pipeline owners possess to
some extent monopoly positions because hydrogen can be transported mainly by
pipelines.
In general, corporate risk management always has to consider aspects like
market concentration, foreign trade, predictability, and political interventions.
More specifically, in the future risk management will change when the iron and
Another risk occurs before or during implementation of the transition
pathway, when there is no incentive for behavioural change and its contribution is not sufficiently considered or communicated. Especially when transition
pathways are mainly focused on technological changes, the contribution of
behavioural change is not incorporated into projections. To overcome this risk,
stakeholders suggest clearly communicating which parts of society are able and
willing to contribute to behavioural change and the extent of change required.
When changing behaviour (such as saving energy or producing electricity) is
associated with status, then all parts of the society could be involved. For
example, smartphones can be seen as a status symbol for all parts of society. To,
for example, show one’s power consumption and production in real time could
become a trend, and be an incentive for private investment and behavioural
change.
Cluster 5: Conditions of competition of (financial) markets
The cluster conditions of competition of (financial) markets includes mainly financial risks and the lack of planning security for investors as a prevalent implementation risk. Increasing dependence on electricity imports and international
policies (e.g. steel policy in the USA) as well as the underestimation of market
dynamics are seen as further risks within this cluster.
Lack of foresight and efficiency as the main criteria for decision and planning, as well as missing education for professions needed in future, are further
risks that may hinder transition. If politics fosters transition, there is the risk
that the intended direction will harm some sectors or companies in
unintended ways.
The risks stemming from financial markets is appraised by stakeholders ten
times higher than from the real economy. As decarbonisation is highly
dependent on financial capital, developments in financial markets are very
important for the transition. Additional risks occur for the proposed transition
pathway in the iron and steel sector. For its implementation, electricity prices
between €0.03 and €0.05/kWh, together with modest CO 2 pricing, guarantee a
cost- efficient transition as they level out unit operating expenditures of
hydrogen- based steel production with conventional carbon- intensive production (details are given in Mayer, Bachner, and Steininger, 2019). However,
these prices are uncertain at the current state. Which sectors will compete for
hydrogen produced by renewable electricity (the demand by mobility, housing,
the chemical industry, etc.) is also unclear. The potential for a hydrogen
economy exists, but emerging new dependencies and asymmetric market power
relations may have to be dealt with. For instance, pipeline owners possess to
some extent monopoly positions because hydrogen can be transported mainly by
pipelines.
In general, corporate risk management always has to consider aspects like
market concentration, foreign trade, predictability, and political interventions.
More specifically, in the future risk management will change when the iron and