Insights Blog

Economics and Climate Policy

March 24, 2020

Germany’s Die Zeit, one of Germany’s most influential newspapers, featured the work of Economist Willi Semmler, director of SCEPA’s Economics of Climate Change project, on climate policy and strategy.

The extensive report, titled “Climate Economics,” profiled Semmler’s major contributions to climate change research in a two-part series of articles, titled “Economics and Climate Policy” and “Saving The Climate With Economic Policy.”

In “Economics and Climate Policy,” Semmler proposes a climate change model where policymakers use a uniform combination of economic policies consistent across borders. He makes the case for his proposal by contrasting it with examples of countries who failed to meet their climate goals when implementing one or two piecemeal economic policies on a national level, independent of one another. “Think integrated, then act,” the paper asserts. Semmler concludes that it’s crucial to understand the interaction of economic laws to create an effective ‘package’ of policies agreed upon across borders and markets.

“Saving The Climate With Economic Policy,” the second article in the series, outlines nine distinct economic climate policies. The article describes each policy before adding their advantages, disadvantages, and “cooperation effects”— or how the policy would act across borders and the likelihood of international cooperation. The policies include C02 Taxes, Emissions Tradings, Green Bonds, CO2 Sinks, Changing Habits, Relaxed Central Bank Policies, Bonds Spanning Generations, Integrated Portfolio Management, and Green Wealth Taxes. Green Bonds was the only policy deemed “ideal” for cross-border investments, while both CO2 Sinks and Bonds Spannings Generations earned a “good” rating. The remaining policies were dubbed either “medium,” a “downside,” or “unsuccessful.”

The articles, co-authored by Thomas Fischermann, Editor at DIE ZEIT, and João Paulo Braga, a PhD student in economics at The New School for Social Research, highlight the need to move forward with climate change policies proven to be effective in practice and over time.