Green Industrial Policy: Challenges and Opportunities for a Globally Inclusive and Fair Energy Transition

This report by the Stockholm Environment Institute examines the global trend of 'green industrial policies' and the risks they pose to emerging market and developing economies (EMDEs). It argues that current policies in major economies often prioritize domestic benefits and geopolitical security over global fairness, potentially creating a 'two-speed' transition that hinders global climate goals. The document proposes several pathways to ensure a more inclusive transition, including scaled-up climate finance, technology transfer, and the adaptation of trade rules.

• Major economies are shifting toward more interventionist climate policies, utilizing a combination of subsidies, procurement policies, clean technology incentives, carbon taxes, emissions trading, local content and manufacturing provisions, and the EU's Carbon Border Adjustment Mechanism.
• Current green industrial policies in major economies risk marginalizing emerging market and developing economies (EMDEs) because they are often too focused on domestic benefits, industrial competitiveness, and geopolitical security rather than global fairness and climate targets.
• To avoid hindering global climate ambition and to ensure EMDEs engage in the transition, policies must provide tangible economic and social benefits that address development priorities alongside emissions reductions.
• The report identifies several options to align industrial policy with global equity and climate goals, including ensuring access to and co-development of green technologies with EMDEs, promoting fair integration into green value chains, scaling up international climate finance for industrial development, and adapting trade rules and standards.

APA

Stockholm Environment Institute (2025). Green Industrial Policy: Challenges and Opportunities for a Globally Inclusive and Fair Energy Transition. https://www.sei.org/publications/green-industrial-policy-challenges-opportunities-globally-inclusive-fair-energy-transition/

Chicago

Stockholm Environment Institute. Green Industrial Policy: Challenges and Opportunities for a Globally Inclusive and Fair Energy Transition. 2025. https://www.sei.org/publications/green-industrial-policy-challenges-opportunities-globally-inclusive-fair-energy-transition/.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=Green Industrial Policy: Challenges and Opportunities for a Globally Inclusive and Fair Energy Transition |date=23 October 2025 |url=https://www.sei.org/publications/green-industrial-policy-challenges-opportunities-globally-inclusive-fair-energy-transition/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitute2025green, author = {{Stockholm Environment Institute}}, title = {{Green Industrial Policy: Challenges and Opportunities for a Globally Inclusive and Fair Energy Transition}}, institution = {Stockholm Environment Institute}, year = {2025}, month = oct, url = {https://www.sei.org/publications/green-industrial-policy-challenges-opportunities-globally-inclusive-fair-energy-transition/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }