Estelle Cantillon / Research Director FNRS and professor of Economics

Université Libre de Bruxelles / Solvay Brussels School of Economics and Management / Economics

The translation of this testimony was generated automatically by a translation program. Thanks for your understanding.

Challenges for economic research:
Economists have long studied the effectiveness and efficiency of different policy instruments (taxes, subsidies, standards, cap-and-trade schemes, …) to reduce the environmental impact of economic activities. Climate change requires a more fundamental shift of our system of production and consumption. I think the three main research challenges for economists from this perspective are:

  • Fair transition: There are many ways to reduce emissions: Which ones impose the least costs on Society? How do we design transition paths that are effective and socially fair (both within generations and across generations)?
  • Measurement: Effective policies need accurate data on economic activities. Right now, we can more or less accurately compute the carbon footprint of production activities but have a harder time to measure the carbon footprint of supply chains and therefore the carbon footprint of our consumption. Such distortions in measurement lead to carbon leakage (where firms outsource the carbon-intensive component of their production, with no decrease in global emissions), reduced effectiveness of policies, and misdirected investments.
  • New forms of economic governance: System change requires different modes of public intervention from the usual policy instruments (taxes, standards, …) aimed at addressing market failures. The main challenge is one of coordination of all stakeholders – firms, States, individuals. This is a role which States are less used to and not appropriately equipped for (regulatory agencies are typically sectoral).
    Individual action and barriers:
    From an individual perspective, we have long adopted different behaviours at home to reduce our environmental footprint. In terms of mobility, we do not have a car and use bikes for our daily commute, we spend our vacation in Europe and avoid planes. In terms of energy, we have switched to a green electricity producer, have isolated our house, installed thermal solar panels, and reduced the ambient temperature to 19 degrees. In terms of consumption, we have significantly reduced our meat consumption, we avoid packaged food and bring our own bags and containers to stores, we compost, and avoid over-consuming material goods.
    My profession leads me to travel abroad on a regular basis. I have made it a rule to systematically look for alternatives to planes and typically use the train for travels that last less than 8 hours. I am also increasingly using video-conferences to avoid trips.
    The main challenge I encounter is the lack of information about the (life-cycle) carbon footprint of different options.

Originally posted 2018-05-02 02:26:00.