Cheaper by the Cluster? The Politics of Infrastructure Collaboration for Industrial Decarbonization

Abstract: Under what conditions do firms cooperate rather than compete when providing public goods? I study this in the context of industrial decarbonization in the U.K. Conceptualizing common infrastructure technologies as club goods suggests a non-linear relationship between cooperation and group size. Given spatial externalities inherent to these technologies, group size is shaped by the density of firm production sites. Within the firm, the decision to cooperate or compete varies with production site concentration: firms are more likely to pursue cooperative strategies at production sites that are highly concentrated. With original production site and firm data from the U.K., I present three sets of results using a policy shift to study trends in firm behavior. First, I demonstrate that firms with highly concentrated production sites are more likely to cooperate. Second, these firms, increasingly reference decarbonization and climate change in mandatory disclosures. Third, interviews with these firms provide insights on the robustness and variation in the depth of cooperation and project development.

Recommended citation: Pike, Ryan. (2026). Cheaper by the Cluster? The Politics of Infrastructure Collaboration for Industrial Decarbonization. Working Paper.