Just Transition

This paper links two things that are often dealt with separately when discussing what we mean by the word “just” in the notion of a “just transition”. On the one hand, activists and reformers see this as an opportunity to empower marginalised populations and redistribute wealth-generating assets using the state in the form of green industrial policy. On the other hand lies private finance, especially in the form of asset managers, who own huge swathes of global companies. These competing notions of “just” are used as a way to discuss how to have a transition that leverages the investments of the private sector without once again simply giving capital everything it wants at the expense of everyone else.

This paper questions the extent to which standard market-fixing and macroeconomic expansionary measures will be able to direct and shape new industrial ecosystems in economies across the Atlantic. Moreover, it advances a strategic industrial policy approach for deep industrial restructuring, followed by a discussion on specific industrial policy instruments and how conditionalities and policy alignments are central to balancing risks and rewards in the process of green transition.

Sustainability transition perspectives are receiving increasing attention in policy and practice. This paper discusses how they can be used to address the net-zero energy transition, which is an extraordinary challenge given its complexity and urgency. It highlights six key principles to guide “transitions based” decarbonisation policies: system transformation, effectiveness, sensitivity to context, adapting policies to transition phases, policy evaluation and learning, and politics.

People may arrive in one or the other of these camps for many reasons. Advocates of the investment-centred approach tend to link climate policy to broader concerns over economic justice. Developments like the Gilets Jaunes protests in France, and more recent responses to rising energy prices in the wake of the war in Ukraine, have raised doubts about the viability of aggressive carbon pricing, making an investment-centred approach more attractive. More subtle, but equally important, are the different underlying economic visions behind the two approaches to climate policy. This paper brings these submerged differences to the surface.

What is the role of financial markets in a green transformation? There are two key aspects to this question. First, what should be the balance between private and public funding of the transformation? Second, what are the dangers that our modern financial market structure poses to a successful green transformation?

The green turn in central banking has generated considerable controversy. Some voices have questioned central banks’ growing engagement with climate issues, arguing that unaccountable technocrats do not have the tools or the political legitimacy to intervene in (or possibly highjack) the low-carbon transition. Others question the continued emphasis on voluntary decarbonisation, even among green champions in the central bank community. This paper intervenes in and nuances this “too little vs too much” debate.

This paper critically examines whether the European fiscal framework will be sufficient to stabilise the macro economy in the aftermath of the multiple crises, let alone achieve the goals of a green transition that leads to full capacity utilisation of the economy. The  reader will come to understand that private finance alone is neither sufficient nor desirable to achieve the goals of a socially just green transition.

This article wants to provide food for thought on what a long-term economic policy could look like. In the context of the climate crisis, increasing inequality, the loss of biodiversity and financial instability, the challenge is to craft a strategic approach that can set the course for long-term success.

This publication series aims at contributing to the emergence of a transformative economic thinking, integrating environmental, social, and economic dimensions, after the wreckage of neoliberal economic thought that clearly has reached its date of expiry. It is the product of a collaboration of the Heinrich-Böll-Stiftung, the ZOE Institute for future-fit economies, and Finanzwende Recherche.

This paper attempts to overcome the polarisation between inclusive green growth and degrowth. The authors suggest that the idea of “post-growth” can serve as a unifying concept and define the pillars of a progressive economic policy agenda that can help Germany, the European Union, and the United States achieve their net-zero ambitions while ensuring prosperity and reducing inequality.