Climate change mitigation is crucial, yet the factors influencing where and why emission-intensive firms in global production networks reduce or fail to reduce emissions remain insufficiently explored. We apply the materiality concept to examine the challenges firms face in adopting climate-friendly processes across different industries and places. To conceptualize how actors can address these challenges, we integrate the GPN 2.0 framework with related research, identifying four mechanisms through which actors can enhance the competitiveness of and mitigate risks associated with climate-friendly processes. We argue that the legitimacy of employing these mechanisms depends on their economic impact, particularly the effects of strategic (de-)/(re-)couplings by global lead firms on local firms, corporate buyers, and consumers. Empirically, we analyze how and why different actors, particularly state institutions, have increased the competitiveness of climate-friendly cement and synthetic jet fuel production in Germany, encouraging global cement lead firms to plan the production of synthetic jet fuels from cement plant emissions and green hydrogen. The study demonstrates that EU- and German-level regulatory interventions have successfully incentivized substantial corporate investments in low-emission production. However, firms seek to recoup these costs by passing them on to corporate buyers and consumers. As these price increases diffuse through the value chain, they generate resistance and thereby undermine the legitimacy of the very regulatory efforts that initiated the transition.
Walker et al. (Fri,) studied this question.