Why Decarbonization Is the Next Big Market?

In the 21st century, a global perspective of environmental change has merged with decarbonization and economists believe that decarbonization can be a step forward in the economic growth and development of economies. The purpose of this study is to validate or negate the proposition drawn by economists that decarbonization is the next big market. This chapter uses content analysis of prior literature to highlight the role of decarbonization for the economies. The findings of this chapter identify four key drivers for decarbonatization which are the regulatory and institutional framework, rapid technological innovation, realignment of financial markets and consumer & corporate preference, which contribute to decarbonization in the economies. This chapter contributes to the existing knowledge by highlighting four key drivers for decarbonization. Firstly, regulatory and institutional frameworks, including the national net-zero pledge, the Paris Accord, the emission pricing mechanism, and sustainable industrial policies, have generated sustained, enduring market signals, supporting industries in investing in green technologies, hence increasing decarbonization. Secondly, fast-paced cutting-edge technologies play a pivotal role in the decarbonization of economies. Older technologies have been superseded by green ones in many economies. Innovations in artificial intelligence, digital twins, and other emerging digital breakthroughs are advancing rapidly, giving rise to new investment platforms and value chains. Thirdly, worldwide financial markets are continuously developing investment strategies to incorporate climate considerations. Decarbonized assets are in the preferred selections of these markets, like climate finance instruments, ESG-indexed landings, clean-tech ventures, etc., and are firmly gaining place in the market. Fourthly, this study contributes by highlighting that consumer and organizational choices are now converging towards sustainability. Low-carbon products, green consumption, and brands based on green orientation are much appreciated by the consumers.