Claims
The study addresses a specific question: what consequences for employment and economic growth are to be expected if Europe increases its CO2 reduction target from 20% to 30%?
Economic developments are notoriously hard to predict, but there is a widespread view according to which an increased reduction target will threaten both growth and employment. For obvious reasons, this view makes the implementation of effective climate policy difficult, sometimes impossible. On the other hand, there is the view that a strategy of green growth can spur growth by tackling the challenge to reduce emissions. We study conditions under which either view is true and show that the structure of traditional economic models supports the first view by construction. We also show that enhancement of this model structure – warranted for empirical and theoretical reasons, and made more urgent by the global financial crisis – leads to support for the latter view.
Economic growth is a means, not an end, and we are aware of the broad issues of social exclusion, equity, and global solidarity that lie at the heart of the sustainability agenda. However, the focus of this study is on a specific question: can green growth be achieved in Europe for the decade to come? Our answer to this question is a limited contribution to the debate on sustainable development, but hopefully a useful one.
