During the high point of market orthodoxy, economists argued that the most 'efficient' way to combat climate change was to simply let markets determine the price of carbon emissions. Today, there is a growing consensus that prices need to be regulated and that a carbon price on its own might not be enough.
Global emissions of greenhouse gases are still rising rapidly and the window of opportunity to limit the increase in average global temperatures to less than 2 degrees is vanishingly small.
What Went Wrong
EU carbon prices have been far too low to stimulate investment in low carbon technologies and efforts to establish a global carbon market have largely failed.
New Economy in Progress
Putting a price on carbon will not in itself lead to a zero-carbon economy: it will require large-scale public action and investment to create the necessary markets and infrastructure.
5 WAYS THAT ARE DISCUSSED TO GREEN PROSPERITY
Setting a minimum price on carbon emissions within the EU’s trading scheme.
Replacing emissions trading with a carbon tax, increased steadily over time.
Large-scale public investment in the necessary infrastructure; carbon-pricing alone will not suffice.
Designing climate policies that also reduce the gap between the rich and the poor.
A broader policy approach that integrates the risks of species extinction, air pollution and other environmental dangers.
AVERAGE WARMING (°C) PROJECTED BY 2100
Tom Krebs on a US Inflation Reduction Act for Europe
What should modern climate policy look like? Why the US Inflation Reduction Act might be a good example.
Are Green Jobs Good Jobs?
We invited leading experts to our New Paradigm Workshop to discuss what the labor market in a climate-neutral world will look like.
50 Years Limits to Growth
Beyond Growth – A Government’s View
Is Green Capitalism a Myth?
Modern Climate Policy
Climate Policy from a Keynesian Point of View
A new paper by J. W. Mason (City University of New York) emphasises the need for investment-centred instead of price-centred climate policy.
Coalition agreement 2021-2025: Additional financial leeway for future investments?
The coalition agreement is here. Do the targeted fiscal policy instruments allow sufficient leeway for the necessary climate and other investments in the future? Tom Krebs and Janek Steitz with an assessment.
Climate investment: How to finance the 2030 targets
An analysis by Agora Energiewende and Forum New Economy shows: Making use of smart fiscal policy, the new German government can finance the necessary climate protection measures despite a return to the debt brake.
2030 targets require tripling of climate protection investments
A study commissioned by Agora Energiewende and Forum New Economy shows that achieving a 65 percent reduction in greenhouse gas emissions by 2030 compared to 1990 would require climate protection investments to be up to three times higher than currently estimated.
The Human Predicament of the 21st Century
Climate policy and the modern state: A hydrogen package for Germany
Green hydrogen is considered an essential component for the climate transition. A new study by Tom Krebs develops a modern hydrogen strategy for Germany.
OTHER MAIN TOPICS
After decades of overly naive market belief, we urgently need new answers to the great challenges of our time. More so, we need a whole new paradigm to guide us. We collect everything about the people and the community who are dealing with the question of a new paradigm and who analyze the historical and present impact of paradigms and narratives – whether in new contributions, performances, books and events.
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THE ROLE OF
For decades, there was a consensus that reducing the role of the state and cutting public debt would generate wealth. This contributed to a chronic underinvestment in education and public infrastructure. New research focuses on establishing when and how governments need to intervene to better contribute to long-term prosperity and to stabilize rather than aggravate economic fluctuations.
More than a decade after the financial crisis there still seems to be something seriously wrong with the financial system. Financial markets still tend to periodically misprice risk and contribute to boom and bust cycles. A better financial system needs to discourage short-termism and speculative activity, curtail systemic risk and distribute wealth more broadly.
The rising gap between rich and poor has become a threat to social cohesion in most rich countries. To reverse this trend it will be crucial to better understand the importance of different drivers of income and wealth inequality.
Do we need a whole new understanding of economic growth? What would be a real alternative? How viable are alternatives to GDP when it comes to measuring prosperity? These and other more fundamental challenges are what this section is about.
After three decades of poorly managed integration, globalization is threatened by social discontent and the rise of populist forces. A new paradigm will need better ways not only to compensate the groups that have lost, but to distribute the gains more broadly from the start.
The euro was planned during a period in which economic policy making was driven by a deep belief in market liberalism and the near impossibility of systemic financial crises. This belief has been brought into question since the euro crisis, which showed that panics do happen. New thinking needs to focus on developing mechanisms to protect eurozone countries from such panics and to foster economic convergence between members.
The current Corona crisis is probably the worst economic crisis of the post-World War 2 era. Economists are working hard on mitigating the economic effects caused by COVID-19 to prevent a second Great Depression, the break-up of the Eurozone and the end of globalisation. We collect the most important contributions.