Structural change in a green hydrogen economy: Socioeconomic and climate change implications

Green hydrogen is considered a solution for achieving climate change goals. Because regions have different availabilities of renewable energy compared to fossil fuels, and because of higher transport costs for renewable energy carriers, a global green hydrogen economy would impact the location advantages of regions and countries. This, in turn, could lead to widespread structural change as it would affect production technologies in terms of both quantities and prices, reorganize global value chains, and impact the economic structure of regions. Such structural change can bring about opportunities and risks to countries and regions. Places rich in renewable energy could become producers and exporters of green products, while industrialized regions with limited renewable energy sources and tighter labor markets may lose competitiveness in certain industries and see the industries leave. It could enable renewables-rich developing countries to develop their economies, decreasing global income inequalities and wellbeing disparities. However, structural change could also reinforce existing unequal patterns of international trade and economic development, if countries that are currently “lagging behind” get further locked into lower value-added functions in global value chains. The main aim of this thesis is to identify the opportunities and risks for promoting sustainable economic development that arise from the structural change caused by a global green hydrogen economy, with a focus on developing economies. This thesis is divided into three parts, interspersed with short synthesizing chapters. Part I focuses on understanding what the process of structural change in a green hydrogen economy would look like and the implications thereof for sustainable development policies and strategies. First, it discusses how different literature streams have conceptualized sustainability transitions, structural change, and economic development to build an integrated understanding of what economic development and sustainability transitions in the context of a global green hydrogen economy would mean, including which factors would influence these processes of change. Second, it develops an analytical framework based on academic traditions focused on the geography of sustainability transitions, international technology transfer, and regional development to identify the potential opportunities and risks for a developing region that would become a producer and exporter of green hydrogen. It then provides empirical insights on these opportunities and risks, including potential synergies and trade-offs between goals and between impacts in different geographical scales, based on the case of the Brazilian state of Ceará, where a green hydrogen corridor is being developed with the Netherlands. Given that the rise of a green hydrogen economy could impact industry location patterns, Part I then combines the economic geography literature with the technoeconomic literature on green hydrogen value chains to identify the potential scenarios for the future spatial organization of these industries and the implications thereof for regional development. Part II focuses on quantifying the socioeconomic and environmental impacts from different possible configurations of green hydrogen value chains, drawing mostly on input-output modeling. It takes the case of the decarbonization of the steel industry as an example to compare two value chain configuration options: (a) direct exports of green hydrogen produced in a renewable energy-rich developing region for green steel production in an industrialized country, and (b) co-location of green steel production with green hydrogen production in the developing region followed by exports of the green steel to the industrialized country. Since green hydrogen and green steel industries are not yet reflected on existing data from official statistical offices, a method is proposed to allow the ex-ante modeling of this structural change. The method consists in combining life-cycle inventory and technoeconomic data to introduce emerging industries and commodities to input-output tables and then combining a price and a quantity model to balance the augmented tables. This approach allows technological coefficients to remain exogenous, while ensuring the consistency between physical and monetary quantities and enabling the disaggregation of quantity and price effects. This method is then applied to the case of the steel industry, which comes in two parts. First, a global perspective is provided by comparing green hydrogen imports to the Netherlands with the relocation of the Dutch steel sector to Brazil through a multiregional model. This is followed by an analysis that takes a subnational perspective by analyzing the socioeconomic impacts within the Brazilian state of Ceará, a developing region aiming to become a producer and exporter of green hydrogen. Part III focuses on the role of international research collaborations in providing access to complementary knowledge and contributing to accelerating the energy transition. It assesses the case of the Technology Collaboration Programs (TCPs) from the IEA. Then, it reflects on the challenges that the author, as a researcher involved in international collaboration, has faced during her thesis research as well as during her involvement in the works of the Intergovernmental Panel on Climate Change (IPCC) and the United Nations Framework Convention on Climate Change (UNFCCC) Technology Executive Committee (TEC). Finally, the insights from Parts I, II, and III are brought together in the Synthesis.