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Begin New Search Topic Climate Change Author Guntram Wolff

1. The geopolitics of the European Green Deal

Author:
Mark Leonard, Jean Pisani-Ferry, Jeremy Shapiro, Simone Tagliapietra, and Guntram Wolff
Publication Date:
02-2021
Content Type:
Policy Brief
Institution:
European Council on Foreign Relations (ECFR)
Abstract:
The European Green Deal will have profound geopolitical repercussions, some of which are likely to have an adverse impact on the European Union’s partners. The EU should prepare to manage these repercussions in its relationships with important countries in its neighbourhood such as Russia and Algeria, and with global players such as the United States, China, and Saudi Arabia. The bloc should engage with oil- and gas-exporting countries to foster their economic diversification, including into renewable energy and green hydrogen that could be exported to Europe. The EU should improve the supply security of critical raw materials and limit its dependence on other countries – primarily on China – for these materials. It should work with the US and other partners to establish a ‘climate club’ whose members would apply similar carbon border adjustment measures. The EU should become a global standard-setter for the energy transition, particularly in hydrogen and green bonds. It should internationalise the European Green Deal by mobilising the EU budget, the EU recovery fund, and EU development policy. The EU should promote global coalitions for climate change mitigation, such as one to protect the permafrost. The bloc should promote a global platform on the new economics of climate action, to share lessons learned and best practice.
Topic:
Foreign Policy, Climate Change, European Union, Geopolitics, and Green Deal
Political Geography:
Europe

2. A green fiscal pact: climate investment in times of budget consolidation

Author:
Zsolt Darvas and Guntram Wolff
Publication Date:
09-2021
Content Type:
Policy Brief
Institution:
Bruegel
Abstract:
The additional public investment need required to meet the European Union’s climate goals is between 0.5 percent and 1 percent of GDP annually during this decade. Increasing green public investment while consolidating deficits will be a major challenge. While our simulations show that budget consolidation can be done at a moderate pace in line with EU rules if those rules are interpreted flexibly, past consolidation episodes resulted in major public investment cuts. This time, there is a need for a major increase in investment. A ‘green golden rule’ (excluding net green investment from the fiscal indicators used to measure fiscal rule compliance) is the most promising option to address this tension. Relaxing the strictness of the EU fiscal framework beyond its existing flexibility and the proposed green golden rule does not appear necessary in the next few years. The uncertain growth impact of green public spending and the risks to growth from climate change create difficult trade offs in fiscally weaker countries. In any case, better regulatory policy and a higher price on emissions should incentivise private green investment and reduce public costs. These ingredients should be combined to form a ‘green fiscal pact’.
Topic:
Climate Change, Budget, European Union, and Public Investment
Political Geography:
Europe

3. Can climate change be tackled without ditching economic growth?

Author:
Guntram Wolff, Simone Tagliapietra, and Klaas Lenaerts
Publication Date:
09-2021
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
Higher levels of economic activity tend to go hand-in-hand with additional energy use and consumption of natural resources. As fossil fuels still account for 80 percent of the global energy mix, energy consumption remains closely related to greenhouse gas emissions and hence to climate forcing. This paper explores whether decarbonisation and economic growth are compatible or whether the world economy needs to grow less to be able to reduce greenhouse gas emissions fast enough to reach net zero in 2050. The literature provides profoundly different answers to this question, with scholars positioning along a spectrum that extends from the most optimist version of ‘green growth’ theories to sceptical ‘degrowth’ theories. While globally, CO2 emissions per unit of GDP are declining, the decoupling rate from 1995 to 2018 was only -1.8 percent annually. To achieve net zero by 2050, the rate would have to accelerate to -8.7 percent, assuming population and GDP growth projections as given, or by a factor of almost five. To keep GDP growth and population at their projections and thus reject the proposition of de-growth, decoupling would have to accelerate massively. Two avenues are crucial: reducing the energy intensity of production and/or the emissions intensity of energy. The huge fall in the price of renewable energy provides hope that decoupling can accelerate. Decoupling rates have accelerated in the last decade and decoupling is substantially faster in the European Union. In the EU, we estimate that decoupling only has to accelerate by a factor of 2.5. We do not think degrowth propositions advanced in the literature will be pursued and therefore focus on the main challenges that must be tackled to achieve decoupling. Unprecedented efforts are required to achieve green growth. But hoping for humanity to sacrifice growth appears unrealistic.
Topic:
Climate Change, Economic Growth, Fossil Fuels, Carbon Emissions, and Decarbonization
Political Geography:
Global Focus