Autocatalytic Networks and the Green Economy

Green goods are products necessary to reach sustainable development targets. Since they offer many benefits, we discuss the question of why not all countries produce them. Using the economic complexity framework, we study how likely it is that a country will get a comparative advantage by producing green goods. We also study the externalities in terms of diversification prospects that arise from gaining a comparative advantage by producing and exporting green goods. For this purpose, we define a directed network in which nodes are products and links are the probability that a product catalyzes another one several years later. This network uses bilateral trade flows at the 6-digit level to assess the autocatalytic structure of product adoption, by identifying clusters of self-reinforcing products. We show that green goods are less prone to self-reinforcement compared to their non-green counterparts and offer fewer avenues for economic diversification. We also find that the impact of diversification varies across countries, suggesting that a one-size-fits-all approach to fostering the production of green goods may not be effective.