Research

A novel dataset is constructed to examine the dynamic employment effects of green and brown public procurement across the U.S. production network. Using detailed contract-level data, I estimate both direct and indirect impacts via local projections. A one standard-deviation green spending shock crowds in employment significantly more on impact than a brown spending shock. However, these direct effects quickly converge to zero. Employment in upstream sectors increase several quarters after the shock. Downstream effects are small. Possible mechanisms lie in the duration of contracts, the type of contracts and the backward linkages of the sectors green and brown spending target. These findings highlight the value of a dynamic network perspective on heterogeneous government spending objectives and suggest that green procurement can produce significantly different effects than brown spending along the supply chain, underscoring the economic potential of green fiscal policies that simultaneously take sectoral interdependencies and potential worker transitions into consideration.

Climate change and geopolitical tensions render supply shocks more likely, which can trigger inflation (shockflation). Additionally, the EU’s reliance upon an emissions trading system as its chief climate mitigation policy can give rise to inflation (carbonflation). Through simulations using an input-output price model for Germany, we show that the same systemically significant sectors – those essential for human livelihoods, production and commerce – present points of vulnerability for shockflation and also carbonflation, if carbon markets are the only policy tool deployed to cut emissions. A total of up to 91.3 percent of potential carbonflation can be attributed to just six systemically significant sectors. Our findings remain robust under varying assumptions regarding substitution and passthrough effects. The challenge for policymakers is to design policies that combine transformation with stabilization. Enhancing resilience, dampening price volatility and designing green industrial policies for these key sectors can reduce the macroeconomic risks of both carbonflation and shockflation.

Sustainable finance is often discussed as a solution to the climate crisis, but its impacts are limited and its discourse focuses on mobilising private investments through public de-risking, without considering direct government action. We argue that this is due to an implicit reference to mainstream economic theory assuming that an active state leads to time inconsistency problems and crowding-out effects. However, these assumptions have been sufficiently refuted as public investments may actually crowd-in private capital. We therefore propose a paradigm shift towards what we call Public Sustainable Finance, aimed at empowering the role of the state in the green transition on the discursive, policy, and political economy levels. Studying the case of Germany, we show how Public Sustainable Finance can be introduced despite tight fiscal regimes. To this end, we propose that the Climate- and Transformation Fund be given its own borrowing powers. By borrowing an average of 23 billion euros annually from 2024 to 2030, the existing financing gap that has been exacerbated following the November 2023 constitutional court ruling can be closed, enabling a more rapid and effective green transition.

In diesem Artikel plädieren wir für „Public Sustainable Finance“, bei welchem dem Staat für eine maximale Transformationswirkung eine zentrale Rolle zukommt. Bisheriges Sustainable Finance konzentriert sich auf ESG-Kriterien, Divestment, Voting, Engagement und Impact Investing. Ziel ist die Mobilisierung privaten Kapitals, indem ein „De-risking“ privater Investitionen durch öffentliche Mittel ermöglicht wird. Staatliches Handeln in Form von Direktfinanzierung findet in der aktuellen Diskussion keine Beachtung. Dem New Consensus-Modell nach führt ein zu aktiver Staat zu Time Inconsistency-Problemen und Crowding OutEffekten. Die theoretischen Annahmen finden sich auch im aktuellen institutionellen Gefüge in Form des Maastricht-Vertrags der EU und der deutschen Schuldenbremse wieder. Jedoch wurden diese auf der Loanable Funds-Theorie beruhenden Annahmen in den vergangenen Jahren hinreichend widerlegt. Kredite entstehen aus dem nichts und können zusätzliche öffentliche Investitionsmittel bereitstellen, die wiederum vermehrte private Investitionen nach sich ziehen (Crowding In). Auch im aktuellen Schuldenbremsen-Regime sind über Ausnahmetatbestände zusätzliche öffentliche Investitionen in Klimaschutz und Energiewende möglich. Hierfür schlagen wir vor, den Klima- und Transformationsfond (KTF) mit eigenen Kreditermächtigungen auszustatten. Durch die Aufnahme von Krediten in Höhe von 162 Mrd. Euro bis 2030 können die bestehende Finanzierungslücke geschlossen und wichtige Zukunftsinvestitionen getätigt werden.

The gas price shock has been a major contributor to inflation in Germany. In this context, Dullien and Weber (2022a, b, c) proposed a two-tier pricing scheme for natural gas in the spring of 2022 that lowers the price for a base quota through a subsidy while maintaining high market prices on the margin. In response to the war in Ukraine, the German government acted swiftly to try to access new sources of gas supply. However, it was not until September that the government decided to dampen the effects of the gas price shock and initiated the so-called “gas price brake” that implements such a two-tier system. In this article, we argue that the gas price brake makes a critical contribution towards providing relief for households, and alleviates cost pressure on firms while retaining incentives for consumers and businesses to save gas. It is also an important measure for macroeconomic stabilisation and marks a breakthrough in the policy approach to price shocks in systemically significant sectors. The gas price brake establishes that targeted price stabilisation can be an important tool for governments in times of emergencies. Yet, the delay in responding to the price shock meant that the speed of policy implementation had to take priority over everything else and that help came at a time when the shock had already percolated through the whole economy. Our times of overlapping emergencies require disaster preparedness in economic policymaking for governments to be able to react to sectoral shocks without delay (Weber et al., 2022).

Energiesicherheit und -unabhängigkeit sind der neue Imperativ nach dem von Wladimir Putin befohlenen Angriffskrieg auf die Ukraine. Eine beschleunigte Transformation hin zur Klimaneutralität dient damit gleichzeitig ökologischen und sicherheitspolitischen Zielen. Sie erfordert massive öffentliche Investitionen in einem sehr kurzen Zeitraum. Um diese zu finanzieren, sollte das von der Ampelkoalition beschlossene Sondervermögen „Bundeswehr“ von einem Sondervermögen für Energiesicherheit und -unabhängigkeit flankiert werden. Zu diesem Zweck bietet es sich an, den bestehenden Energie- und Klimafonds (EKF) mit Kreditermächtigungen auszustatten und dessen Ausnahme von der Schuldenbremse im Grundgesetz zu verankern. Dies ist bereits für das Sondervermögen „Bundeswehr“ geplant und schafft Rechtssicherheit.