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“Big Push” Green Industrial Policy

Niko Jaakkola, Frederick van der Ploeg, Anthony Venables
CESifo, Munich, 2023

EconPol Forum 24 (6), 32-36
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  • Carbon pricing is a central part of climate policy, but is politically difficult while the economy is still reliant on fossil fuels
  • The long-lived green investments required to break the carbon lock-in depend on expected taxes, not current taxes
  • Policies which target the expectations of the private sector can shock the economy and move it onto a green path
  • Green industrial policy can leverage technological/political feedbacks to kick-start the transition
  • Fossil fuel bans can help break the technological and political lock-in into carbon reliance

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