International Economy

The Social Guarantee refocuses progressive politics on human relations, on how we care for each other, and on the importance of investing in the social infrastructure on which the rest of the economy depends. It draws on current thinking about the foundational economy, the care economy, and sustainable economic prosperity It offers a coherent, ethical, and well-evidenced basis from which to address such issues as investment, regulation, and carbon mitigation.

This paper has argued that an active industrial policy that is context appropriate, coherent, and adaptable can be utilised to address this challenge. Nevertheless, one must acknowledge that the necessary green transition on the EU level comes with transition costs, challenges, and opportunities that affect distinct people, firms, and countries very differently, and hence bears the threat of rising inequalities, both within and among countries. Central to the success of a green transition is, therefore, the EU’s adequate reaction to this fact. This reaction can then enable and facilitate a green transformation that really leaves no one behind.

A green transformation of the economy will require a major commitment to green investment to reduce and respond to environmental degradation. The main objective of this paper is to explore the macroeconomic implications of green investment in the transformation to a green economy.

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?