Sir, Economists are usually circumspect in coming out together and speaking with one voice. Today we have chosen to unite, calling on Europe’s leaders to set the continent on a new path to growth.
Right now, our political leaders are paralysed by a false choice. Some countries refuse to leave the high-carbon route, which leaves open the risk of climate change severely damaging our long-term prosperity. The economic disruption that followed major floods across Europe in the past 12 months is a harbinger of what is to come. The cost of inaction is simply in no one’s strategic interest.
On the other side are those that see a new pathway of low-carbon investment to pursue, generating strong and clean growth – not just in the future, but now. Over the next 15 years, infrastructure investments worth about $90tn will modernise the world’s cities, agriculture and energy systems. Europe must set the correct course now to steer these into low-carbon alternatives to unsustainable fossil-fuel based structures.
This is an unprecedented opportunity to drive investment in low-carbon growth, bringing benefits including jobs, health, business productivity and quality of life. Major companies, smart investors and a new generation of entrepreneurs are already demonstrating how markets can drive low-carbon growth. It is already happening, but Europe is now no longer in the lead.
Our leaders have a tough choice this week. Either they cave in to vested interests and continue in the direction of business as usual. Or they agree to cut emissions by at least 40 per cent by 2030, setting Europe and the world on a pathway to decarbonise its economies and keep global warming below 2 degrees.
Germany, France and the UK must strike a deal that works for all members of the bloc, with Poland and other central and eastern European countries supported in their transition from coal. We must establish a floor from which ambition can grow, not a ceiling that will kill off aspiration.
The deal that leaders come to this week will set the tone for how the world will engage in negotiations in cutting carbon. All 28 leaders must make this week’s council meeting the springboard from which Europe can lead the way into a cleaner world. It is the only future that makes sense.
Thomas Piketty Professor, École des hautes études en sciences sociales (EHESS) and Paris School of Economics
Claudia Kemfert Director of Energy, Transport and Ecology, German Institute for Economic Research (DIW Berlin)
Cameron Hepburn Professor of Environmental Economics, University of Oxford
Financial Times
