Making Climate Protection Fair Across the Generations // Climate Protection Through Technology Policy Increases Approval of Today’s Generations, but Unnecessarily Burdens[...]

Climate Protection Through Technology Policy Increases Approval of Today's Generations, but Unnecessarily Burdens Future Generations

Researchers at ZEW Mannheim and Statistics Norway have come to the conclusion that current generations are less negatively affected by technology policies than they are by direct CO2 pricing.

Economists often argue in support of CO₂ emissions pricing to tackle climate change. In the political reality, however, it is common to resort to "green" technology policies (such as subsidisation of renewable energy, energy efficiency standards, regulations on emission limits for cars, etc.). Researchers at ZEW Mannheim and Statistics Norway have come to the conclusion that current generations are less negatively affected by technology policies than they are by direct CO₂ pricing. They may therefore tend to support green technology policy through elections and referendums.

"Green technology is relatively capital-intensive. When green technology is forced into the market, capital is implicitly subsidised as compared to direct CO₂ pricing. Current generations, especially the older ones, have already built up capital. Unlike future generations, who still have to accumulate capital, the current generations would thus be far less burdened by green technology policy than they would by climate policy that is directly based on carbon pricing," says Professor Sebastian Rausch, head of the ZEW Research Unit "Environmental and Climate Economics" and professor of economics at Heidelberg University.