The bounds of the possible in climate policy
The current state of knowledge indicates that the political efforts of the Federal Republic of Germany fall short of what is required for the country to achieve its own ambitious climate protection goals. The Kopernikus project Ariadne is concerned with gaining a better understanding of which policy instruments are necessary and suitable for achieving the goals of the Paris Climate Change Agreement. The participating researchers at the University of Potsdam are working on issues including the macroeconomic modeling of the energy transition.
What political measures are already in place to achieve the climate protection goals set? Are they sufficient to achieve these goals? What measures are other states using? And are these measures transferable to the German context?
Image: unsplash @Scott Graham
Changes to our climate throw up many political questions, but also social and economic issues that the Kopernikus project Ariadne (or “Ariadne – Evidence-Based Assessment for the Design of the German Energy System Transformation” to give its full title) launched in July 2020 is seeking to address. The green and white papers process at the heart of the project aims to present decision-makers with options for shaping policy in such a way that compliance with climate protection goals can be facilitated using socially accepted policy instruments. A comprehensive dialog process involving decision-makers from politics, business representatives and civil society will form a core part of the project from the outset.
With the Ariadne project, a network of leading research institutions is now taking up work on an unprecedentedly comprehensive research process focused on shaping the German energy transition. The Chair of Economic Growth, Integration and Sustainable Development held by Professor Maik Heinemann at the University of Potsdam is contributing to this project coordinated by the Potsdam Institute for Climate Impact Research (PIK). The researchers on this work package with the title “Climate policy in a low-interest rate environment—Investments for a climate-neutral economy” are concerned with the macroeconomic modeling of the energy transition and the analysis of fiscal policy options for forging a path through this transition. Various alternative options for implementing CO2 pricing and their effects, not least on state revenue streams, are being studied. Modifying the structure of the taxation system, for example by levying taxes on CO2 emissions, would have different distributional effects depending on exactly how the system is modified. Such effects are significant both for securing public acceptance for climate policy and for ensuring that transfers to acutely affected households are distributed effectively. Analyzing and quantifying these effects is an important component of the project, which also sets out to identify the fiscal policy measures that could support the transition to a climate-neutral economy effectively and the extent to which state borrowing could also play a major role.
The Kopernikus projects are one of the largest German research initiatives working on the energy transition. Their overarching goal is to make it possible for Germany to become climate neutral by the year 2050.