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Statement by the Franco-German Council of Economic Experts: "Green Deal" could best be coordinated with a uniform Europe-wide price on carbon

Press release from 27 April 2021

In a statement published today, the "Franco-German Council of Economic Experts" calls on the EU to establish a clear and uniform mechanism for pricing carbon. "Such a mechanism would encourage other countries, especially the U.S. and China, to join a far-reaching international alliance for carbon pricing," says RWI President Christoph M. Schmidt, who co-chairs the Council on the German side.

The key points in a nutshell:

  • The Franco-German Council of Economic Experts (FGCEE) has released a statement today. Its motivation is the increased level of ambition on climate targets displayed by the European Union (EU) with the proclamation of the “Green Deal” as its principal growth strategy. To reach carbon neutrality by 2050, effective immediately, member states will have to increase their efforts to reduce emissions, inducing steeply rising mitigation cost.
  • The FGCEE stipulates that the best coordination signal in this endeavor would be a uniform price on carbon which encompasses all actors, sectors, regions, and technologies. To ascertain that all goods consumed in the EU face the same carbon price, it is sensible to credibly prepare the implementation of border carbon adjustments (BCA) applied to imported goods.
  • A BCA mechanism should be considered by the EU only after having established a clear and credible uniform carbon pricing mechanism within its jurisdiction.

"The EU should preserve its self-conception of taking responsibility for the global climate. Exports should therefore not be exempted from carbon pricing in a mirror image of the burden on imports," says Christoph M. Schmidt, President of RWI - Leibniz Institute for Economic Research and Co-Chair of the Franco-German Council of Economic Experts.

The complete statement is available at https://en.fgcee.de/publikationen.

The Franco-German Council of Economic Experts (FGCEE) was established in 2019 as an independent council to advise the French and German governments on matters of economic policy which are of joint interest for both countries. Its co-chairs are Philippe Martin (Conseil d’analyse économique and Sciences Po/Paris) and Christoph M. Schmidt (RWI and Ruhr-Universität Bochum). Members of the FGCEE are, furthermore, Marcel Fratzscher (DIW and Humboldt-Universität zu Berlin), Nicola Fuchs-Schündeln (Goethe-Universität Frankfurt), Clemens Fuest (ifo-institut and Ludwig-Maximilians-Universität München) Christian Gollier (Toulouse School of Economics), Isabelle Méjean (CREST-Ecole Polytechnique, Département d'Economie), Xavier Ragot (Sciences Po/Paris), Katheline Schubert (Paris School of Economics), and Beatrice Weder di Mauro (CEPR).

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Contact:
Sabine Weiler (Communikations), , Tel.: +49 201 81 49-213

Press release in pdf format (available only in German)

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