ABSTRACT
This chapter explores the political-economic process for the transition to a low carbon economy in the United Kingdom. The decrease in carbon emissions and the parallel improvement in energy efficiency are both said to be caused by favourable changes in industrial and energy structures, framed by specific policies in support of a low carbon economy. Accordingly, viewed from the varieties of capitalism (VoC) perspective, the British transition towards a low carbon economy is expected to be based on market-compatible fiscal and legal frameworks that set incentives for firms to decrease their emission activities. VoC perspective portrays the United Kingdom as a liberal market economy (LME), characterised by a pattern of predominantly market-based coordination in the operations of firms and their institutional environment. From the perspective of the VoC approach, the United Kingdom is typically characterised as an ideal LME, which exhibits a dominant pattern of market coordination through investment in transferable assets.
