As part of the series of events, ‘Dialogue on the Economics of Climate Change’, coordinated by the Kiel Institute for the World Economy (IfW), which addresses current issues of climate and energy policy and discusses them at the interface between science and practice, the Forum Climate Economics 8 was organised by ZEW Mannheim together with five projects supported under the funding measure ‘Economics of Climate Change’ of the Federal Ministry of Education and Research. Held under the motto ‘Transparent Carbon Footprints – Information for Climate-Friendly Action’, it featured debates between Professor Andreas Löschel, director of the Centre of Applied Economic Research Münster; Delara Burkhardt, European Parliament member of the German Social Democratic Party (SDP) of Schleswig-Holstein; Joachim Lutz, dean of the Business School of the University of Mannheim; and Udo Sieverding, member of the Consumer Association of North Rhine-Westphalia (Verbraucherzentrale Nordrhein-Westfalen). The discussion was moderated by journalist Conny Czymoch, who was supported by co-moderator Professor Martin Kesternich.
If you can’t measure it, you can’t improve it
Professor Gernot Klepper of the IfW opened the dialogue, emphasising that research should not be limited to the academic circles; it should also include policymakers and members of civil society. In his welcoming address, ZEW President Professor Achim Wambach elaborated on this idea, highlighting that information plays an instrumental role in the fight against climate change: “If everyone knew how much CO2 was involved in the production of a specific product, we could make different decisions as consumers, which would make it easier for the EU to design a border adjustment mechanism. There is still a lack of information in this regard.” State Secretary Professor Wolf-Dieter Lukas at the Federal Ministry of Education and Research also addressed this issue in his opening address, pointing out that scientific and economic data form the basis for political action, as was recently the case with the introduction of the national emissions trading system.
In his keynote speech, Andreas Löschel referred to the sentence “If you can’t measure it, you can’t improve it” to explain how markets and competition can provide opportunities to discover processes that can reduce carbon emissions in different sectors. While there is no doubt that information on innovative technologies is of crucial significance, it could also be worthwhile from an economic perspective to focus on emissions trading and CO2 pricing, since these types of market-based instruments do not require information on households and firms to achieve emissions reductions. Moreover, it is important that the provision of data is subject to uniform rules. Only this way can the true carbon footprint of a product – i.e. the sum of CO2 emissions produced along the supply chain – be determined and a positive impact on consumers’ consumption decisions be achieved. In this context, Delara Burkhardt underlined that it is also the responsibility of policymakers to ensure that supply chains are transparent: “It is vital that policymakers, businesses and citizens have access to reliable and transparent information in order to achieve a successful socio-ecological transition. It is therefore the task of legislators to put in place the right framework conditions, provide clearly defined sustainability standards and establish reporting and disclosure obligations.”
Results of roundtable sessions provide impulses for the discussions
The forum was preceded by two virtual roundtable sessions with representatives of the various fields, chaired and moderated by ZEW researchers Kathrine von Graevenitz, PhD and Professor Martin Kesternich. The results of these sessions were briefly presented by two up-and-coming ZEW researchers and provided further impulses for the panel discussion of the climate dialogue. The results of the first roundtable session placed the focus on the question of how climate policy impacts German and European companies, their competitiveness and their CO2 emissions. Taking up several approaches proposed in this roundtable session, Joachim Lutz pointed out that, in this context, the CO2 price system functions well, but emphasised that it is crucial to ensure that the reference prices are correct and that policymakers provide a level playing field for companies. Further approaches addressed in the session included the circular economy, CO2 storage and sector-specific measures. The second roundtable event discussed the effects of the coronavirus pandemic on public acceptance for climate policy measures. Adding to the central finding of this discussion, according to which the COVID-19 crisis has not reduced awareness for climate policy issues, Udo Sieverding explained that the pandemic allowed many citizens to inform themselves on private investment in climate-friendly alternatives, for instance for their homes. “Many consumers are seeking advice from the Consumer Association – we are very busy at the moment,” said Sieverding. Delara Burkhardt commented that the pandemic has brought to light the need to ensure that ecological transition is socially fair.
The audience had the opportunity to participate in the discussion through several opinion polls and address their questions directly to the panellists via the chat function. The polls as well as the closing remarks of the participants underlined that there is agreement with regard to the path to climate neutrality: What we need above all in the fight against climate change is a scientific data basis, which can only unfold its full effect if policymakers provide the necessary infrastructure and framework conditions. This political framework must ensure that the data is correct and comprehensive, and that citizens and firms receive targeted information.