IDEAS home Printed from https://ideas.repec.org/a/bpj/evoice/v19y2022i2p207-212n7.html
   My bibliography  Save this article

Green Finance and the EU-Taxonomy for Sustainable Activities: Why Using More Direct Environmental Policy Tools Is Preferable

Author

Listed:
  • Fuest Clemens

    (ifo Institute, University of Munich, Munich, Germany)

  • Meier Volker

    (ifo Institute, University of Munich, Munich, Germany)

Abstract

The EU taxonomy on sustainable activities is expected to pave the way for steering capital towards sustainable investments. However, the economic effects are problematic. Promoting “green” capital will lead to income losses due to productivity differences, while greenhouse gas emissions do not change at a given EU emission allowance cap. Worldwide emissions may even increase as carbon intensive production moves outside the EU. While green finance may be used to bind future governments, committing to future climate goals directly is a superior policy since efficiency losses can be avoided.

Suggested Citation

  • Fuest Clemens & Meier Volker, 2022. "Green Finance and the EU-Taxonomy for Sustainable Activities: Why Using More Direct Environmental Policy Tools Is Preferable," The Economists' Voice, De Gruyter, vol. 19(2), pages 261-266, December.
    • Handle: RePEc:bpj:evoice:v:19:y:2022:i:2:p:207-212:n:7
    DOI: 10.1515/ev-2022-0021
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/ev-2022-0021
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/ev-2022-0021?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Fuest, Clemens & Meier, Volker, 2023. "Sustainable finance and climate change: Wasteful but a political commitment device?," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    2. Rahel Aichele & Gabriel Felbermayr, 2015. "Kyoto and Carbon Leakage: An Empirical Analysis of the Carbon Content of Bilateral Trade," The Review of Economics and Statistics, MIT Press, vol. 97(1), pages 104-115, March.
    3. Böhringer, Christoph & Rosendahl, Knut Einar & Storrøsten, Halvor Briseid, 2017. "Robust policies to mitigate carbon leakage," Journal of Public Economics, Elsevier, vol. 149(C), pages 35-46.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vlad STOICESCU & Catalin VRABIE & Teodora BITOIU, 2023. "Energy ecosystems layered over hydrogen valleys for sustainable smart communities. Strategic framework for the Green Deal Industrial Plan implementation in Romania," Smart Cities International Conference (SCIC) Proceedings, Smart-EDU Hub, Faculty of Public Administration, National University of Political Studies & Public Administration, vol. 11, pages 443-498, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Junbo & Ma, Zhenyu & Fan, Xiayang, 2023. "We are all in the same boat: The welfare and carbon abatement effects of the EU carbon border adjustment mechanism," MPRA Paper 118978, University Library of Munich, Germany.
    2. Fabio Antoniou & Panos Hatzipanayotou & Nikos Tsakiris, 2024. "Regulatory Stringency and Emission Leakage Mitigation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 87(6), pages 1407-1424, June.
    3. Clemens Fuest & Volker Meier, 2021. "Will the Centralisation of Carbon Pricing Revenue in the EU Lead to Laxer Climate Policy?," CESifo Working Paper Series 8979, CESifo.
    4. Hertwich, Edgar, 2020. "Carbon fueling complex global value chains tripled in the period 1995-2012," SocArXiv zb3rh, Center for Open Science.
    5. Jia, Zhijie & Wu, Rongxin & Liu, Yu & Wen, Shiyan & Lin, Boqiang, 2024. "Can carbon tariffs based on domestic embedded carbon emissions reduce more carbon leakages?," Ecological Economics, Elsevier, vol. 220(C).
    6. Bierbrauer, Felix & Felbermayr, Gabriel & Ockenfels, Axel & Schmidt, Klaus M. & Südekum, Jens, 2021. "A CO2-border adjustment mechanism as a building block of a climate club," Kiel Policy Brief 151, Kiel Institute for the World Economy (IfW Kiel).
    7. Jakob, Michael, 2021. "Climate policy and international trade – A critical appraisal of the literature," Energy Policy, Elsevier, vol. 156(C).
    8. Sebastian Schäfer & Lisa Altvater, 2021. "A Capacity Market for the Transition towards Renewable-Based Electricity Generation with Enhanced Political Feasibility," Energies, MDPI, vol. 14(18), pages 1-24, September.
    9. Fuest, Clemens & Meier, Volker, 2023. "Sustainable finance and climate change: Wasteful but a political commitment device?," Journal of Environmental Economics and Management, Elsevier, vol. 118(C).
    10. Xu, Qingyu & Hobbs, Benjamin F., 2021. "Economic efficiency of alternative border carbon adjustment schemes: A case study of California Carbon Pricing and the Western North American power market," Energy Policy, Elsevier, vol. 156(C).
    11. Hertwich, Edgar G., 2020. "Carbon fueling complex global value chains tripled in the period 1995–2012," Energy Economics, Elsevier, vol. 86(C).
    12. Li, Changsheng & Qi, Yaping & Liu, Shaohui & Wang, Xu, 2022. "Do carbon ETS pilots improve cities' green total factor productivity? Evidence from a quasi-natural experiment in China," Energy Economics, Elsevier, vol. 108(C).
    13. Banerjee, Suvajit, 2021. "Conjugation of border and domestic carbon adjustment and implications under production and consumption-based accounting of India's National Emission Inventory: A recursive dynamic CGE analysis," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 68-86.
    14. Heijmans, Roweno J.R.K. & Engström, Max, 2024. "Time Horizons and Emissions Trading," Discussion Papers 2024/2, Norwegian School of Economics, Department of Business and Management Science.
    15. Thomas Eichner & Rüdiger Pethig, 2019. "Phase-out of 'coal to power' in an ETS," CESifo Working Paper Series 7554, CESifo.
    16. Yang Zhang & Wenlong Li & Jiawen Sun & Haidong Zhao & Haiying Lin, 2023. "A Research Paradigm for Industrial Spatial Layout Optimization and High-Quality Development in The Context of Carbon Peaking," Sustainability, MDPI, vol. 15(4), pages 1-30, February.
    17. Al Khourdajie, Alaa & Finus, Michael, 2020. "Measures to enhance the effectiveness of international climate agreements: The case of border carbon adjustments," European Economic Review, Elsevier, vol. 124(C).
    18. Karl Zimmermann, 2019. "Public Infrastructure Provision in the Presence of Terms-of-Trade Effects and Tax Competition," EconStor Preprints 193458, ZBW - Leibniz Information Centre for Economics.
    19. Christoph Böhringer & Knut Einar Rosendahl & Halvor Storrøsten, 2021. "Smart hedging against carbon leakage [An overview of the GTAP 9 data base]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 36(107), pages 439-484.
    20. Fernández-Amador, Octavio & Francois, Joseph F. & Oberdabernig, Doris A. & Tomberger, Patrick, 2023. "Energy footprints and the international trade network: A new dataset. Is the European Union doing it better?," Ecological Economics, Elsevier, vol. 204(PA).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:evoice:v:19:y:2022:i:2:p:207-212:n:7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.