Environment

Russia’s President Putin conducts a bloody war in Ukraine. The German government struggles to impose sanctions that could endanger Russian gas supplies. The Wirtschaftswoche headlines: “Putin has Germany under control…

WP 2021-07.

In the last European elections, the so-called green parties won a record number of seats and became the fourth largest bloc in the European parliament. The Greens are now seen as pivotal political allies for passing EU legislation.

Not surprisingly, climate issues have become central to the EU decision-making. As soon as she took office, President Ursula von der Leyen unveiled the European Green Deal, a set of initiatives aiming at making Europe climate-neutral by 2050. However, the deal has already faced criticism and generated tensions between the greener western half of the Continent and the coal-dependent east, between corporations and NGOs, and also between the EU and its trading partners.

Online shopping is increasingly popular. According to a survey from 2019, almost 90 percent of 25- to 44-year-olds had ordered something online during the previous three months. Even half of those aged 65 or more confessed they shopped online. However, online shopping is also criticised for damaging the climate. The Süddeutsche Zeitung, for instance, demands higher postage to protect the climate from the increasing number of parcels that need shipping due to online shopping. Die Welt also considers the possibility of raising postage charges to fight climate change. The article claims that online returns in Germany cause as many daily CO2 emissions as 2,200 cars driving from Hamburg to Moscow. So, do we have to feel bad whenever we order shoes, smartphones or diapers online? Studies have assessed the effects of online trading. They conclude that online orders do usually not cause more greenhouse gas emissions than bricks-and-mortar trade. Yet, there is potential for improvement.

CO2 emission limits and targets are currently all over the news. For example, the European Union is gradually strengthening the environmental standards for new vehicles, with a view to reducing…

By prioritising Paris commitments, while ignoring the more practical concerns of freer energy trade, the EU has put politics over economics. The current phrasing of the Renewable Energy Directive punishes states not party to Paris. Consequently, it will make trade with the United States more difficult, drive up the costs of clean energy, and make it harder for EU member states to meet their emissions targets post-2020.

WP 2017-02. The prevailing opinion among national governments and supranational institutions is that climate change science is settled and drastic cuts in the emissions of CO2 and other greenhouse gases…

At the beginning of October, England became the last constituent part of the United Kingdom to introduce a compulsory charge for plastic shopping bags (to be paid by the shopper), after similar taxes had been introduced in Scotland, Wales and Northern Ireland in previous years. The relevant ministry insists that it is not a tax since “the money from the charge does not go to the government“.

We show that
A) it actually is a tax, in spite of government protestations,
B) its complexity is costly misdirected, and
C) instead of improving the environment, the tax may actually worsen it.

Strange behaviours are often caused by strange taxes or subsidies. The strange behaviour of Volkswagen believing it could cheat and not get found out was motivated partly by the strange tax/subsidy policies in Europe which subsidised diesel at the cost of petrol cars.

Two routes exist in theory towards making people behave more environmentally: through taxation, and through better defining and upholding of property rights. Empirical evidence suggests that at least in the EU, environmental taxation does not seem to work. Greater reliance on property rights should be the guiding principle during any environmental negotiations.