Leading the Twin Transition: A Socio-Technical Framework for Green Digital Trade under Global Carbon Constraints

Abstract

Moving beyond the static “enabling-rebound” framework, this paper introduces Socio-Technical Transition (STT) theory and its Multi-Level Perspective (MLP) to conceptualize green digital trade as a dynamic system linking data governance and the trade regime. We identify the European Union’s Carbon Border Adjustment Mechanism (CBAM) as a “landscape shock” that destabilizes the incumbent, carbon-intensive trade “regime” by pricing embedded carbon at the border. In response, we propose “Digital Carbon Competitiveness” (DCC)—a firm’s dynamic capability to measure, manage, verify, and valorize carbon emissions using digital tools—as the critical “niche lever” for scaling innovation. Based on this, we outline a multi-level governance design (micro-niche incubation, meso-regime reformation, macro-rule shaping) and derive a set of testable propositions on how the interaction between CBAM and DCC affects emissions and competitiveness. The paper’s contributions are threefold: (1) extending MLP theory to the under-researched domain of international trade; (2) conceptualizing and operationalizing DCC; and (3) proposing an integrated governance pathway for shaping the “twin transition.”