To grow or not to grow?

Economic policy approaches for the climate-critical decade.

Over the past few years, the concept of Green Growth has become increasingly influential as a potential answer to tackling global ecological breakdown. However, it is strongly contested by proponents of Post-Growth and Degrowth, criticizing Green Growth’s central assumption that economic growth in the global North can be sustained while bringing humanity’s ecological footprint back into planetary boundaries.

Part I of the Policy Forum brings together leading experts from the fields of Green Growth, Postgrowth, and Degrowth to debate their different visions for the pathway toward sustainable economies. We will give room to separately explore the ideas and arguments of Green Growth and Postgrowth/Degrowth and bring the different approaches together to discuss commonalities, differences, and synergies.

The European Union decided to be climate-neutral by 2050 and, hence, become the first climate-neutral continent in the world.  Becoming climate-neutral can be considered one of the biggest challenges in our industrial societies. This transition will shape our future tremendously. The invasion of Ukraine further reinforced the necessity to speed up this transition out of geopolitical and moral considerations. Macroeconomic thinking and policies set the incentives for many other policy areas, consumers, firms and other research disciplines. It provides a framework for decisions on which investments will be carried out, which form of energy will be used in the future and how the transition will be financed. We claim it is necessary to make macroeconomics fit for a climate-neutral future. This includes considering climate-related issues in all macroeconomic decisions and discussing the appropriate policy tools to make this transition happen in an efficient and socially fair manner.  

Time for a New Paradigm

Making macroeconomics fit for a climate-neutral future

Green Innovation &
Experimental Innovation Policy

Which policy measures are most effective in promoting green innovation in the context of the German sustainability transition? Experimental methods can rigorously test relevant answers to such questions. This enables fruitful collaboration between policymakers and researchers. Randomized control trials have revolutionized development economics, earning them the Nobel Prize. They measure the effect of a policy compared to its absence.

In countries with high per capita incomes, it has been little used, although promising opportunities exist in energy and innovation policies. Rigorous impact evaluations enable policy-makers to put taxpayers' money where it will have the greatest impact in terms of their return on investment. Other countries can also learn from German policy measures to promote research in green technologies. This is important, especially since one-third of the technologies needed to meet the Paris climate targets are not yet on the market.