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The Double Transformation

The transition to a carbon-neutral economy will make it impossible for competition authorities to keep operating as they have over the past few decades. To accelerate the clean-energy revolution and ensure that dominant companies do not erect new barriers to market entry, policymakers must shed 40 years of conventional wisdom.

CAMBRIDGE – The world’s advanced economies are in the midst of dual structural transformations that will change every aspect of our lives, from how we work and do business to how we regulate markets.

The most notable of these transformations is digitalization, which has been so ubiquitous over the past 25 years that referring to the “digital economy” today sounds as odd as talking about the “electricity economy.” To be sure, the digital shift is not complete. Relatively few companies, for example, currently use cutting-edge artificial-intelligence technologies. But billions of people around the world already use AI-powered tools like chatbots and online translation.

The other transformation is the shift to a carbon-neutral economy, which will upend the energy, construction, transport, and manufacturing industries, as well as numerous other sectors. The fall in renewables prices, already faster than the declines in computer prices in previous decades, is a strong indicator that this transition is well underway. With renewable power now significantly cheaper than fossil-fuel energy, decarbonization is set to accelerate.

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