Capital stranding cascades: The impact of decarbonisation on productive asset utilisation

A timely low-carbon transition will require a significant decline in fossil fuel production and consumption. This turn exposes the rest of economic sectors to risk reduced usability physical capital stocks via international network linkages. We propose apply simple measure assess extent which shocks might trigger underutilisation across countries productive (‘stranding multipliers’). Our results highlight relevance supply-side risks. First, among all activities, global sector exhibits highest stranding multiplier on system. Second, some most exposed are downstream mainly affected by second-round effects. Third, we rank according their external potential, finding France, Australia Slovakia at top, USA, Italy China its bottom. Finally, exposure analyse more depth origins transmission channels links affecting (USA, Germany). • present novel method asset capture propagation risks networks. calculate ‘stranding multipliers’ for 43 56 sectors. Fossil-triggered affect also USA economies risk.