  Urgently needed carbon emissions reductions might lead to strict
command-and-control decarbonization strategies with potentially negative
economic consequences. Analysing the entire firm-level production network of a
European economy, we have explored how the worst outcomes of such approaches
can be avoided. We compared the systemic relevance of every firm in Hungary
with its annual CO2 emissions to identify optimal emission-reducing strategies
with a minimum of additional unemployment and economic losses. Setting specific
reduction targets, we studied various decarbonization scenarios and quantified
their economic consequences. We determined that for an emissions reduction of
20%, the most effective strategy leads to losses of about 2% of jobs and 2% of
economic output. In contrast, a naive scenario targeting the largest emitters
first results in 28% job losses and 33% output reduction for the same target.
This demonstrates that it is possible to use firm-level production networks to
design highly effective decarbonization strategies that practically preserve
employment and economic output.
