Abstract for: Analysis of Policy Measures and Feedback Effects on Industry Transformation Towards Carbon Neutrality

Motivated by the urgent need to significantly reduce carbon emissions in the coming years and decades, we develop a qualitative system dynamics model to investigate the role of feedback effects in the transformation of the industrial sector towards carbon neutrality. Using systems thinking, this research analyses the complex interactions between policy measures, investment decisions in different environmental measures to reduce CO2 emissions (e.g. use of electrical and thermal energy from renewable sources, increase of energy efficiency), CO2 compliance, pressure for further climate measures, the economic success of the industry and the availability of investment funds. The study contributes to the qualitative identification and exploration of levers that policymakers can use to encourage industry to invest further in climate change mitigation. It also provides an important basis for the development of quantitative modelling approaches.