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We cordially invite you
to the following event:
Lecture by Guntram
Wolff: Climate and
Macroeconomics
with Guntram Wolff, Director of Bruegel,
Brussels
Thursday, 2 June
2022, 5:00 pm (CEST)
Venue:
wiiw, Rahlgasse 3, 1060
Wien
Seminar Room, Souterrain
As the number of guests
is limited, please
register here.
Guest Speaker:
Guntram B. Wolff
Director of Bruegel
since June 2013, Guntram
Wolff is a recognized
thought leader and
academic. He regularly
testifies at the
European Finance
Ministers' ECOFIN
meeting, the European
Parliament, the German
Parliament (Bundestag)
and the French
Parliament (Assemblée
Nationale). From
2012-16, he was a member
of the French prime
minister's Conseil
d'Analyse Economique. In
2018, then IMF managing
director Christine
Lagarde appointed him to
the external advisory
group on surveillance to
review the Fund’s
priorities. In 2021, he
was appointed to the G20
high level independent
panel on pandemic
prevention, preparedness
and response. He is also
a professor (part-time)
at the Solvay Brussels
School of Université
Libre de Bruxelles,
where he teaches
economics of European
integration.
Climate and
Macroeconomics
Economic growth has
historically been the main
driver of rising
greenhouse gas (GHG)
emissions. To achieve
steep emission reductions,
the world would have to
either decouple global GHG
emissions from gross
domestic product (GDP) at
an unprecedented pace or
face deep cuts to GDP. The
lecture will review the
literature on both
degrowth and green growth
and discuss their most
important arguments and
proposals.
It will then discuss the
outlines of a ‘green
fiscal pact’ in the
European context. The
additional public
investment need required
to meet the European
Union’s climate goals is
between 0.5 percent and 1
percent of GDP annually
during this decade.
Increasing green public
investment while
consolidating deficits
will be a major challenge.
While simulations show
that budget consolidation
can be done at a moderate
pace in line with EU rules
if those rules are
interpreted flexibly, past
consolidation episodes
resulted in major public
investment cuts. This
time, there is a need for
a major increase in
investment. A ‘green
golden rule’ (excluding
net green investment from
the fiscal indicators used
to measure fiscal rule
compliance) is the most
promising option to
address this tension.
Relaxing the strictness
of the EU fiscal framework
beyond its existing
flexibility and the
proposed green golden rule
does not appear necessary
in the next few years. The
uncertain growth impact of
green public spending and
the risks to growth from
climate change create
difficult trade-offs in
fiscally weaker countries.
In any case, better
regulatory policy and a
higher price on emissions
should incentivise private
green investment and
reduce public costs. These
ingredients should be
combined to form a ‘green
fiscal pact’.
We are very much looking
forward to seeing you
there!
Yours sincerely,
Dr. Mario Holzner
Executive Director wiiw
Dr. Robert Stehrer
Scientific Director wiiw
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