Michele Cascarano, Filippo Natoli, Andrea Petrella, 18 May 2022

The question of whether firms are able to adapt to a changing climate is central to understanding the long-run economic effects of climate change. This column presents evidence from Italy showing that high temperatures affect firm demography by reducing the entry of newborn firms in the market and increasing business closures, while relocation to colder areas plays a minor role. Balance sheet data reveal a dichotomy between large firms, which successfully adapt improving their profitability, and smaller ones for which negative temperature spillovers become entrenched.

Thomas Douenne, Adrien Fabre, 01 May 2022

While many economists are in favour of carbon taxation, the public often opposes this climate policy. This column uses data from a survey of 3,000 people in France to show that rejection of a carbon tax is driven by pessimistic beliefs regarding the properties of the tax. Even when revenues from the tax are redistributed to households so as to make the policy progressive, most people think that they and low-income households would lose out, and that the policy would not be effective at reducing emissions. Public investments and standards could help foster support for an ambitious climate policy.

Céline Grislain-Letrémy, Bertrand Villeneuve, 27 April 2022

The costs of natural disasters have risen dramatically over the last decades. Besides the escalating climate crisis, this rise in costs is largely explained by urbanisation in exposed, often flood-prone, areas. This column examines how land-use and insurance policies can limit urbanisation and explains how insurance policies shape real estate prices. Simple observed policies, with a prohibited red zone and a zone without insurance-tariff differentiation, are relatively efficient. Red zones must be redefined as climate risks or population pressures change.

Luiz de Mello, João Tovar Jalles, 25 April 2022

Attitudes towards the environment have evolved over time, in part due to greater awareness about the challenges posed by climate change. Policy plays a part in this process, including through the decentralisation of policy responsibilities to the regional and local governments. This column shows that there is a link between policy decentralisation and attitudes towards the environment, with evidence from individual-level survey-based and aggregate national accounts data pointing to the potential for decentralisation to foster environmentally friendly attitudes and to influence policymaking.

Goran Dominioni, Dan Esty, 22 April 2022

The EU and the US are considering proposals for border carbon adjustment mechanisms to curtail the risk of carbon leakage. This column argues that these mechanisms can better mitigate climate change and more likely comply with WTO law when designed to account for effective carbon prices in exporting countries instead of focusing on explicit carbon prices alone. While there are administrative challenges to crediting effective carbon prices, existing trade accounting methods (notably from anti-dumping and countervailing duty subsidy cases) provide ample experience and know-how to overcome these difficulties.

John Muellbauer, Janine Aron, 24 March 2022

A key common feature of the global climate crisis and the Global Financial Crisis (GFC) lies in destabilising feedback loops. This column identifies and compares these highly non-linear processes, with lessons for policymakers and modellers. The cascades and contagion of the financial accelerator have climate parallels. Absent decisive action, accumulating greenhouse gases, in raising global temperatures, will lead to more carbon release and even higher temperatures, ultimately rendering much of the planet uninhabitable. Russia’s war creates immediate separate crises for the financial and global climate systems. By delaying approaches to net zero, their linkages increase future financial stability risks.

Olivier Blanchard, Jean Tirole, 21 March 2022

A report generated by a commission of 24 distinguished economists focuses on three structural challenges for the global economy. The column sets out some of the conclusions. While the challenges of climate change, inequality and demographic change are significant, solutions – though sometimes expensive or unpalatable – exist.

Keisaku Higashida, Jota Ishikawa, Nori Tarui, 20 March 2022

Existing studies of the impact of carbon pricing on carbon emissions typically ignore the role played by international transportation. This column provides a framework to assess the importance of this sector for carbon leakage across borders and across sectors. The authors identify the importance of asymmetric trade volumes on shipping routes, and the interplay between transportation costs and foreign direct investment choices, in determining the amount of carbon leakage. This shows the need to understand the market environment when designing carbon pricing policies. 


The Japanese government aims to realize a "new capitalism" based on the concepts of "Virtuous Circle of Growth and Distribution" and "Pioneering a New Post-Corona Society." In the new capitalism, the issues to be addressed include the decline in productivity and international competitiveness of the Japanese economy, as well as climate change and the intensifying international competition over technology.

In this symposium, European and Japanese experts will discuss the current debate on the new capitalism, "Climate Change and Economic Dynamism" and "Global Value Chains (GVC) Resilience in the Face of Geoeconomics Shocks," and explore ways to solve both global and Japanese problems.


  • Time and Date: 5:00pm-6:30pm (JST) / 9:00am-10:30am (CET), Wednesday, March 23, 2022

Keynote Speech: Agenda for the New Capitalism

YANO Makoto (Chairman, RIETI / Project Professor, Institute of Economic Research, Kyoto University / Professor by Special Appointment, Sophia University)

Panel Disscussion1: Climate Change and Economic Dynamism --Innovation for economic and planetary security

Panelists (in order of appearance)

Rick VAN DER PLOEG (Research Fellow, CEPR / Professor of Economics and Research Director, Oxford Centre for the Analysis of Resource Rich Economies (OxCarre), University of Oxford)

ONO Yuki (Representative, Hachidori Denryoku, Borderless Japan, Inc.)


Richard BALDWIN (Professor of International Economics, Graduate Institute, Geneva)

Panel Disscussion2: GVC Resilience in the Face of Geoeconomics Shocks

Panelists (in order of appearance)

Richard BALDWIN (Professor of International Economics, Graduate Institute, Geneva)

TODO Yasuyuki (Faculty Fellow, RIETI / Professor, Faculty of Political Science and Economics, Waseda University)


WATANABE Tetsuya (Vice President, RIETI)

Summary and Concluding Reflection

Richard BALDWIN (Professor of International Economics, Graduate Institute, Geneva)

Niels Thygesen, Roel Beetsma, Massimo Bordignon, Xavier Debrun, Mateusz Szczurek, Martin Larch, Matthias Busse, Mateja Gabrijelcic, Laszlo Jankovics, Janis Malzubris, 16 March 2022

One of the key challenges for the next decade is how to facilitate the green transition. Governments are expected to scale up public investment, buffer the costs of more severe weather-related shocks, and deploy other fiscal tools in a way that facilitates a smooth private sector transition, as well as handle the unavoidable distributive effects of a higher carbon price. This column discusses this year’s conference of the European Fiscal Board, at which a prominent line-up of speakers had an open and inspiring exchange on how the greening challenge could be addressed in the future of the EU fiscal framework. 

Palizha Airebule, Haitao Cheng, Jota Ishikawa, 28 February 2022

Carbon emissions are conventionally measured solely from the perspective of producers. Critics argue that this weakens the emission reduction targets set by participants of the United Nations Climate Change Conferences. This column analyses the emissions of the five largest polluters using a novel measure that accounts for both the consumer and producer perspective. This increases measured emissions from the US and Japan and reduces those from China, India, and Russia due to international trade patterns. The finding raises important questions about how to appropriately allocate responsibility for reducing carbon emissions in the future.

Daron Acemoğlu, Thorsten Beck, Maurice Obstfeld, Yung Chul Park, 28 February 2022

As the world is (hopefully) emerging from the Covid-19 pandemic, major challenges await societies across the world related to climate change, inequality, digitalisation, and the undermining of democracy. A new book from CEPR and the Korea Institute of Finance discusses the institutional changes needed to address these challenges and the necessary reforms to make the global financial system more resilient.

Don Fullerton, Arik Levinson, 15 February 2022

Mauro Pisu, Filippo Maria D’Arcangelo, Ilai Levin, Asa Johansson, 14 February 2022

Despite the commitments of the 2021 UN Climate Change Conference, countries’ climate mitigation policies are not enough to meet their ambitious emissions reduction targets. This column puts forward a framework for designing comprehensive decarbonisation strategies that promote growth and social inclusion. A policy mix based on three components is needed: (1) emission pricing, (2) standards and regulations, and (3) complementary policies that offset distributional effects. A robust and independent institutional framework and credible communications campaigns are key to managing policy constraints and enhancing public acceptance of mitigation policies.

Pragyan Deb, Davide Furceri, Jonathan D. Ostry, Nour Tawk, 31 January 2022

The COVID-19 recession reduced overall energy demand, but electricity generation from renewable sources increased and has been resilient. Based on data from a panel of 176 countries over the period 1965 to 2019, this column shows that recessions result in a permanent, albeit small, increase in energy efficiency and in the share of renewables in total electricity. These effects are stronger when complemented with environmental and energy policies to incentivise and hasten the transition towards renewable energy sources.

Jun Arima, 26 January 2022

The 26th UN Climate Change Conference of the Parties (COP26) concluded ‘successfully’ with the adoption of the Glasgow Climate Pact. The agreement was the first to target specific energy sources. This column reviews the COP26 landscape and the challenges going forward. Developing countries are expected to continue pressuring industrialised ones to achieve net zero sooner and raise nationally determined contributions. The lack of space for realistic international discussions on energy security may limit the effectiveness of pushing the COP26 standards.

Yasuo Tanabe, 23 January 2022

In July 2021, the EU announced a Carbon Border Adjustment Mechanism aimed at avoiding carbon leakage from the EU and promoting emissions reductions worldwide. This column summarises and reflects on a recent conference on the topic held by the EU-Japan Centre for Industrial Cooperation. It discusses the mechanism’s proposed implementation schedule, consistency with WTO rules, and implications for EU–Japan trade relations. It highlights the important role Japan should play in the decarbonisation effort, especially by harnessing its strengths in technology and innovation.

Alberto Prati, Olivier Chanel, Morgan Raux, 16 January 2022

Each year, the ‘international job market for economists’ involves over 1,000 junior candidates and several hundred recruiters from all over the world meeting for short pre-screening interviews at annual congresses in Europe and in the US, thus generating a momentous and avoidable global hypermobility. This column argues it is time to reassess this unsustainable recruitment system and estimates the carbon footprint of alternative systems.

Luis Garicano, 14 January 2022

The EU’s current fiscal framework has failed to fully deliver on both its goals: ensuring long-term discipline and facilitating a countercyclical fiscal stance. This column argues that the political difficulties of agreeing on a comprehensive Stability and Growth Pact reform can be side-stepped by allowing the Pact to remain in place while attracting countries into a parallel system. The author proposes the establishment of a new European Climate Investment Facility to provide grants and loans to fight climate change until 2050, when the Union must reach net zero emissions, and an independent European Fiscal Agency to assess the good standing of member states to access this new facility.

Ishan Nath, 24 December 2021

Global warming is expected to dramatically reduce agricultural productivity in hotter parts of the world. This column considers ways to accommodate that change. Hot, poor countries would benefit by shifting away from agriculture into less vulnerable, non-agricultural sectors as temperatures rise, but such a reallocation of resources is unlikely without a major increase in global trade integration. As long as poor countries import little of their food, they are likely to continue specialising in agriculture to meet domestic subsistence needs, even as their farms become increasingly vulnerable to climate change.



CEPR Policy Research