Green Shift to Sustainability: Co-Benefits & Impacts of Energy Transformation on Resource Industries, Trade, Growth, and Taxes

Ener­gy trans­for­ma­tion towards 100% renew­able ener­gy is eco­nom­i­cal­ly inevitable, and social­ly and envi­ron­men­tal­ly desir­able, yet it may pro­duce neg­a­tive sig­nals in out­dat­ed sta­tis­tics as fos­sil trade dimin­ish­es and the sec­tor shrinks. This para­dox should be addressed in a joint report by, e.g., IRENA, IMF, OECD, and the World Bank, and the Task Force on Cli­mate-Relat­ed Finan­cial Dis­clo­sures. Fos­sil fuel extrac­tion and com­mod­i­ty trade will end, and fos­sil asset val­ues erode. The industry’s role in cap­i­tal for­ma­tion, inter­na­tion­al trade, eco­nom­ic activ­i­ty (GDP), and gov­ern­ment rev­enue will decline. New ener­gy sys­tems, based on effi­cien­cy, renew­ables, stor­age, and smart man­age­ment are cheap­er to build, run and main­tain. The growth of elec­tric­i­ty use stim­u­lates inno­va­tion, val­ue cre­ation, and growth in con­sumer rent, as renew­able ener­gy tech­nolo­gies har­vest free envi­ron­men­tal flows that are not trad­ed and often for self-con­sump­tion. The total util­i­ty will grow while trade, GDP and the tax base may shrink. Reports should inform G20 Lead­ers, Min­is­ters of Finance and Cen­tral Bank Gov­er­nors on the true costs and ben­e­fits, and alert them to mis­lead­ing signals.

Year of Publication

Krae­mer, R. A., Carin, B., Gru­enig, M., Blu­men­schein, F. N., Flo­res, R., Math­ur, A., Bran­di, C., Spencer, T., Hel­gen­berg­er, S., Thielges, S., Vaugh­an, S., Whit­ley, S., Ruet, J., Ott, H. (2017): Green Shift to Sus­tain­abil­i­ty: Co-Ben­e­fits & Impacts of Ener­gy Trans­for­ma­tion on Resource Indus­tries, Trade, Growth, and Tax­es. — G20 Insights Pol­i­cy Briefs — Cli­mate Pol­i­cy and Finance.


IASS Authors
Dr Sebas­t­ian Helgenberger
Son­ja Thielges