Traditional economics tells us that to meet policy goals, government should only do the minimum needed to fix a ‘market failure’. A new understanding shows that when the goals are innovation and change, a ‘do the maximum’ approach can be more effective. We should stop aiming to achieve ‘decarbonisation at least cost’, and instead aim to move to the clean economy at maximum gain.

Change in the economy, just as in the climate, can be self-reinforcing, sudden, and irreversible. The world’s fastest transitions to renewable energy and electric vehicles are happening in countries where economic tipping points have been crossed in these sectors. By deliberately targeting these thresholds, we can achieve large-scale change much more quickly than we might expect. To find these opportunities, we need to move away from traditional cost–benefit analysis and adopt a very different approach to decision-making.

Within this chapter the book goes beyond the discussion on the region and EU and provides an examination of how specific positions of CEE countries towards energy and climate policy fit within global energy transitions. It highlights the ability of regional experience to provide insights into global energy transition challenges, and the lessons the region can offer for discussions about how to approach the pathways towards carbon-neutral economies; many challenges of CEE countries are shared internationally. As the region has to adapt to EU climate and energy policies, but is at the same time able to shape these, it provides insights into the process of developing and implementing decarbonisation policy. Our analysis of how EU enlargement has shaped mid- and long-term EU climate and energy policy is a contribution to understanding the EU’s role as an international actor.

This chapter explains the consequences on the labour market of the structural changes induced by decarbonisation policies. These policies are indeed likely going to have consequences on labour income distribution given existing rigidities in the labour markets and their different impacts on sectors and job categories. The chapter notably discusses whether decarbonisation can be a net job creator or destroyer, illustrating how job losses can be managed in a fair manner and how green jobs creation can be incentivised.

This chapter illustrates how decarbonisation is likely to have implications for the business cycle. In this context, it discusses how decarbonisation can change the effectiveness of monetary policy. It also discusses what is the scope for monetary policy to be more actively engaged in the decarbonisation effort, both from an economic but also from an institutional perspective.

The Introduction opens the book by presenting the key issues at stake and explaining the structure of the book. The purpose of this book is to advance the understanding on the macroeconomic fundamentals of decarbonisation. It identifies the major economic transformations and the roadblocks requiring policy intervention. It develops a macroeconomic policy agenda for decarbonisation that would achieve the climate goals of the international community.

This chapter discusses how decarbonisation will affect capital markets and how capital markets can support decarbonisation. One notable focus is on the risk of ‘stranded assets’, that is assets that lose value because of decarbonisation, and the potential implications for financial stability. The chapter also analyses how capital markets can become a key enabler of decarbonisation, also thanks to new sustainable finance instruments such as green bonds.

Describes the rationale for, and approach to, regulation of the electricity industry. Considers the effects of decarbonisation policies and restructuring policies on wholesale and retail competition

Defines economic regulation and explains the importance of economic regulation to modern life. It also describes the changes from the first edition and the structure of the book

Traditional economics tells us that to meet policy goals, government should only do the minimum needed to fix a ‘market failure’. A new understanding shows that when the goals are innovation and change, a ‘do the maximum’ approach can be more effective. We should stop aiming to achieve ‘decarbonisation at least cost’, and instead aim to move to the clean economy at maximum gain.

Change in the economy, just as in the climate, can be self-reinforcing, sudden, and irreversible. The world’s fastest transitions to renewable energy and electric vehicles are happening in countries where economic tipping points have been crossed in these sectors. By deliberately targeting these thresholds, we can achieve large-scale change much more quickly than we might expect. To find these opportunities, we need to move away from traditional cost–benefit analysis and adopt a very different approach to decision-making.

Taking conflicts over new solar energy projects on the agricultural landscape in the global North as its backdrop, the chapter demonstrates how work and labour (including that performed in the North by workers from the global South) are erased both by the opponents and the proponents of such projects. The erasure is consistent with prevailing ways of knowing the human-environment nexus, shaped by an underlying political economy derivative of how international law has constructed and maintained the foundational liberal mythology that separates labour from land. Grounded in our commitment to pursuing a ‘just transition’ to decarbonisation – that is to say, a transition that attends to the distributional effects and disproportionate impacts of decarbonisation on workers and communities – we strive to reconceptualise work and labour as embodied practices of working and living on the land. Everyday socio-spatial practices structured by law implicate ordinary people in the making of landscapes and continuing relations of settler capitalism, shaping how ‘we’ live together on the land, including who belongs and who gets to decide.

Concerns about international competitiveness and the associated global institutions and processes of trade are at the heart of resistance to ambitious climate policy. There is tension between the need to be competitive and the significant costs of decarbonisation in the transition to low-carbon economies. The World Trade Organisation and related agreements simultaneously promote contradictory goals: the removal of 'barriers to trade' including 'behind the border' environmental regulation and the need to support 'sustainable development'. A particular example of the problems for action on climate change are Investor-State Dispute Settlement (ISDS) provisions whereby corporations have been able to sue governments for damages allegedly incurred through the operation of government environmental regulations. Five actions are suggested: raising awareness of the benefits of decarbonisation, developing 'green finance', pursuing standardisation of low carbon technologies, reforming trade law to encourage low-carbon goods and services and ensuring copherence across international frameworks.