Contribution

Climate Policies Require a Long Breath

Kieler Beiträge zur Wirtschaftspolitik, 26; June 2020

  • Impatience about the duration of the present corona lockdown indicates a fundamental problem for (long-term) environmental concerns.
  • Committing to long-term stringent emission reduction targets including the overarching target of the European Green Deal to reach net zero emissions by 2050 is decisive. 
  • Overloading a post-Corona stimulus or recovery package with too many (emission-related) conditions could prevent a timely recovery. What is more important are strong carbon price signals to steer demand and investment taking place during the recovery process.
  • Existing or planned climate policies which provide incentives for emission reductions and technological innovation should remain in place and not be postponed or even weakened to foster any (short-term) recovery.
  • This applies in particular for the announced introduction of carbon prices in the German heat and transport sector and the planned extensions of the EU emissions trading scheme.
  • Confining potential stimulus and recovery measures to their proper purpose does not mean imposing a ban on meaningful (climate or environmental) policies that are not associated with the corona crisis.

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