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Making Ambitious Green Goals Compatible with Economic Dynamics by a Strategic Approach. WWWforEurope Policy Paper No. 30

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  • Karl Aiginger

Abstract

One of the overarching goals of the project WWWforEurope is to develop a strategy which makes very ambitious green goals compatible with a dynamic, open society. An ambitious sustainability strategy is necessitated since we are approaching the absolute boundaries of the planet quickly. A dynamic, open society is warranted since it enables individuals and countries to follow different life styles and preferences, to learn and to enjoy new technologies and services, so that capabilities and choices are increasing, social progress is enhanced and differences in skills, income and wealth are narrowing. Today a trade-off exists between ambitious green goals and output maximisation (and output growth). This trade-off is less evident if we use the perspective of welfare and utility (which are enhanced by sustainability). The trade off is mitigated ever more evident if we broaden the macro- and microeconomic goals (from GDP as overarching measure of performance to life expectancy, happiness, human development or "Beyond GDP" in general), or if we leave the economic paradigm and understand welfare as the sum of "functionalities" or needs (nutrition, mobility, housing, health) which we can achieved by a large variety of organisational and social setups. The trade-off furthermore tends to dissolve for a longer time horizon. It is a defining result of this project that it is possible – but a very demanding task – to mitigate the trade-off between green goals and dynamics or even transform it into a synergy. It has to be done by a strategy developing synergies with the policy to solve social goals. We should be aware of reform resistance and the fact that significant changes always produce winners and losers. Several elements and measures of such a strategy are not yet developed and most of them are neither high on the agenda of policymakers or voters, nor supported by the current price system, an existing regulation, institutions and societal norms.

Suggested Citation

  • Karl Aiginger, 2016. "Making Ambitious Green Goals Compatible with Economic Dynamics by a Strategic Approach. WWWforEurope Policy Paper No. 30," WIFO Studies, WIFO, number 58711, April.
    • Handle: RePEc:wfo:wstudy:58711
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