Addressing climate change will entail major challenges for economic growth, employment, inflation, and public finances. Mitigating the impact of global warming will yield benefits and costs that are yet to be quantified and defined for the global economy and for nations, workers, households, and companies. The Green Frontier: Assessing the Economic Implications of Climate Action offers research originally presented at a major conference at the Peterson Institute for International Economics in June 2023 in Washington, DC, organized to shed light on this still unexplored field of study and recommend policies for the future.
Manufacturing jobs, once the backbone of the modern US economy, have declined as a share of GDP over recent decades, darkening opportunities for middle-class advancement. Similar trends have impacted export superpowers like China, Germany, Japan, Singapore, and South Korea. Driven by nostalgia for a bygone era, however, many countries have turned to reshoring and “industrial policies” to revive manufacturing employment. In Behind the Curve: Can Manufacturing Still Provide Inclusive Growth?, Robert Z. Lawrence argues that these efforts are unlikely to succeed. He demonstrates that deeply rooted forces common to all countries—technological change, shifting consumer spending patterns, and trade—account for lagging manufacturing employment and that these trends are unlikely to be reversed. The industrial sector’s historic role as an engine of opportunity and inclusive growth is unsustainable. Government efforts to promote manufacturing to achieve goals such as industrial self-sufficiency, green transitions, and digital technologies, however well intentioned, may even make economic growth less inclusive. Instead, new policies are needed to help people, places, and countries cope with inevitable changes in the composition of employment.
In considering how we can meet environmental targets, crucial to delivering Net Zero and fulfilling our commitments to the Paris Agreement, and in the context of the fact that we are holding the COP26 Climate Conference later this year, we must now focus on action and on increasing the pace of our response. Faced with impending catastrophe, action is urgently required. It is imperative that radical reduction in emissions of greenhouse gases is central to whatever processes are carried out in the future. Every facet of our existence has an impact on the environment. Greenhouse gases, regardless of their origin, impact on the planet as a whole. It is vital that we stimulate both discussion and action and this book is both a call to arms and a celebration of what is already being achieved, written by a wide cross section of experts in this field. The book is divided into two parts. The first, 'What are the Fundamentals of a Greener Economy?', is intended to consider how change leading to a green economy may be facilitated. Part Two of this book, 'Principles in Action' presents a number of chapters written by those who have engaged in achieving green initiatives in their organisations. Edited by Dr Steven McCabe and Beverley Nielsen of BCU IDEAS, the book has a Foreword by The Baroness Brown of Cambridge, Professor Dame Julia King, DBE FREng FRS, formerly Deputy Chair, Climate Change Committee (CCC), Chair CCC Adaptation Committee; Chair of the Carbon Trust and Non-Executive Director of renewable energy company Ørsted and of fuel cell and electrolyser company Ceres Power. There are contributions from: Vicky Pryce, Economist and Visiting Professor, BCU; Tony Juniper, Chair, Nature Conservation Agency and Fellow, the University of Cambridge Institute for Sustainability Leadership; Sir Jonathan Porritt, Environmental Campaigner; Tom Field, Chief Executive Officer, UVTech-Hygienics; Lisa Trickett and Bryan Nott; Matthew Rhodes, Chair of West Midlands Energy Capital; Margot James, Executive Chair, WMG, Hopi Sen, Research Fellow, WMG, Dr Vannessa Goodship Associate Professor, Materials and Manufacturing Group, WMG, University of Warwick; Tor Farquhar, Ex-HR Director, Tata Steel, Europe; David Seall, Independent Director, Advisor and Chartered Engineer; Richard Haynes, Franco Cheung, Paul Nicol; Craig Sams, co-founder of Green & Black's, advocate of sustainable farming and leading voice for Carbon Gold; with an Afterword by Jack Dromey MP, Vice Chair APPG for the Environment, House of Commons
This report provides an assessment of how governments can generate inclusive economic growth in the short term, while making progress towards climate goals to secure sustainable long-term growth. It describes the development pathways required to meet the Paris Agreement objectives.
This report provides actionable advice on how to design and implement fiscal policies for both development and climate action. Building on more than two decades of research in development and environmental economics, it argues that well-designed environmental tax reforms are especially valuable in developing countries, where they can reduce emissions, increase domestic revenues, and generate positive welfare effects such as cleaner water, safer roads, and improvements in human health. Moreover, these reforms need not harm competitiveness. New empirical evidence from Indonesia and Mexico suggests that under certain conditions, raising fuel prices can actually increase firm productivity. Finally, the report discusses the role of fiscal policy in strengthening resilience to climate change. It provides evidence that preventive public investments and measures to build fiscal buffers can help safeguard stability and growth in the face of rising climate risks. In this way, environmental tax reforms and climate risk-management strategies can lay the much-needed fiscal foundation for development and climate action.
Climate change is one of the greatest challenges of this century. Mitigation requires a large-scale transition to a low-carbon economy. This paper provides an overview of the rapidly growing literature on the role of macroeconomic and financial policy tools in enabling this transition. The literature provides a menu of policy tools for mitigation. A key conclusion is that fiscal tools are first in line and central, but can and may need to be complemented by financial and monetary policy instruments. Some tools and policies raise unanswered questions about policy tool assignment and mandates, which we describe. The literature is scarce, however, on the most effective policy mix and the role of mitigation tools and goals in the overall policy framework.
In the wake of the Great Recession of 2008–09, economists feared that protectionist policies might sweep the world economy, echoing the wave of tariff escalations during the Great Depression of the 1930s. To some surprise, officials were more restrained and largely avoided traditional forms of protection (tariffs and quotas). As a result, economists underestimated the incidence of new protectionism because policymakers increasingly turned to more opaque behind-the-border nontariff barriers (NTBs). Using a combination of statistical analysis and case studies, the authors show that local content requirements (LCRs), a form of NTB, have become increasingly popular. How much was global trade actually reduced on account of LCRs? A conservative estimate might be $93 billion. Case studies featured cover the healthcare sector in Brazil, wind turbines in Canada, the automobile industry in China, solar cells and modules in India, oil and gas in Nigeria, and "Buy American" restrictions on government procurement.
