Abstract Decarbonising the European economy requires substantial investment, but at the same time offers great opportunities for innovation and new markets. The EU has set itself binding climate targets – yet despite the progress already made, there is still a significant need for action, particularly in the transport and buildings sectors. The key lever is a smart policy mix of carbon pricing, targeted support for green technologies and reliable rules that advance both climate protection and economic growth. To ensure that rising energy costs do not primarily affect poorer households, policymakers must use the revenue from carbon pricing specifically for social compensation. Cheaper electricity is also crucial to ensure that industry remains competitive. Furthermore, greater public investment in research and development is needed, as well as an active labour market policy to support workers in transitioning to future-proof careers.
Brandt et al. (Fri,) studied this question.
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