New framework from “Efficiency first” to “Decarbonization first” in European building sector needed
05/25/2023 - In addition to costly renovations, many inexpensive measures exist to facilitate the diffusion of renewables in the building sector. As of 2019, buildings were responsible for about a third of European GHG emissions. A key objective of EU energy use policies to reduce these emissions should therefore be focused on the decarbonization of buildings, beyond merely decreasing energy demand. This is stated in a new Commentary published in the journal Joule by a team of researchers from the Potsdam Institute for Climate Impact Research (PIK) and Fraunhofer Institute for Solar Energy Systems (ISE).
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Climate change risk to price stability: Higher average temperatures increase inflation
05/24/2023 - Increased average temperatures could drive up annual food and headline inflation by up to 1.18 percent by 2035, a new ECB working paper with PIK expertise shows. This effect persists over 12 months in rich and poor countries alike, making climate change an important economic factor for price stability.
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Effective capital markets are needed to protect the climate
05/22/2023 - A new study investigates the role of effective capital markets for climate protection and the energy transition. Banks collect savings and make them available as loans and the greater the difference between savings and loan interest rates, the more it costs to invest. This affects, for example, investments in fossil-free steel plants, power generation, or heating systems. The analysis by the Potsdam Institute for Climate Impact Research (PIK) and the Mercator Research Institute on Global Commons and Climate Change (MCC) has now been published in the renowned Journal of the Association of Environmental and Resource Economists (JAERE).
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PIK expertise on the Petersberg Climate Dialogue
05/04/2023 - Ministers from 40 countries met this week at the Petersberg Climate Dialogue in preparation of the next UN Climate Conference COP28 in November. Johan Rockström, Director of the Potsdam Institute for Climate Impact Research (PIK), was among the invited speakers at the meeting, which is hosted annually by the German government with the conference presidency. “The Petersberg Climate Dialogue is an important stepping stone for the upcoming COP later this year in Dubai, where the Global Stocktake will be at the heart of international climate negotiations,” explains Rockström.
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EU border tax on CO2 offers huge opportunity to tackle climate change
04/24/2023 - A price on CO2 emissions from products entering the EU offers unprecedented opportunities in the fight against global warming. But success hinges on how low- and middle-income countries will be engaged. That is the result of a research published today in Nature Communications Earth & Environment.
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E-fuels likely to remain scarce for a long time: PIK analysis paper
03/21/2023 - To advance the current debate on e-fuels, researchers from the Potsdam Institute for Climate Impact Research (PIK) have analyzed data on the global status of e-fuel projects and compiled it in an analysis paper.
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Coal exit can happen only with stronger policies – and with China
02/06/2023 - Current climate policies including efforts like the Powering Past Coal Alliance will not add up to a global coal exit, a new study shows. Countries phasing coal out of the electricity sector need to broaden their policy strategy, or else they risk pushing the excess coal supply into other industries at home, like steel production. The scientists find that China has an opportunity to dominate the renewable energy technology market if it begins phasing down coal immediately. Otherwise, it could dangerously delay the renewable energy breakthrough worldwide.
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Science takes centre stage in Davos
01/20/2023 - PIK Director Johan Rockström participated in the annual World Economic Forum (WEF) Meeting 2023 in Davos this week. In a first, science took centre stage in a Davos plenary session with Rockström outlining how climate change impacts economies around the world.
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Climate, Development, Economics - Kati Krähnert is a Professor at RWI and Bochum University
01/20/2023 - From Potsdam's Telegrafenberg to the Ruhr - since January 1, 2023, Kati Krähnert is Professor of Climate Change and Development at the Faculty of Economics at Ruhr University Bochum. There she researches how the lives of people in the Global South are affected by climate change and how policies need to be designed if they are to improve household climate resilience. She was appointed jointly by the Ruhr University and RWI - Leibniz Institute for Economic Research.
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Federal Research Minister visits PIK
01/09/2023 - The Federal Minister of Education and Research Bettina Stark-Watzinger has visited the Potsdam Institute for Climate Impact Research (PIK). She spoke for almost two hours with climate economist and PIK Director Ottmar Edenhofer, as well as with Administrative Director Bettina Hörstrup and Gunnar Luderer from the Copernicus research project ARIADNE on energy transition policy. Topics included the federal government's hydrogen strategy and research into economic models for extracting CO2 from the air and storing it underground, as well as research into energy systems.
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Climate risk insurance can effectively mitigate economic losses
01/04/2023 - Global warming is expected to lead to an accumulation of particularly intense hurricanes in the United States. This may substantially increase the economic losses caused by these storms. Better insurance could effectively mitigate the climate change-induced increase in economic losses. This is shown in a new study by the Potsdam Institute for Climate Impact Research examining the effectiveness of climate risk insurance in the US.
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Carbon dioxide removal should receive additional financial support
12/20/2022 - Cleaning up greenhouse gases after they have been emitted should be incentivized by subsidies. New evidence from an economic analysis considering international markets suggests an important reason why subsidies should be higher than the price put on carbon emissions to incentivize their reduction. In a first-of-its-kind study, researchers analyze policies for removing carbon dioxide from the atmosphere and storing it underground or in products. The suggested different pricing is not due to technological challenges, but linked to an economic effect called leakage.
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European Union to adopt emissions trading system for transport and heat
12/19/2022 - The European Union this weekend came to some decisions related to its climate policy, namely the EU Emissions Trading System. On this occasion, Ottmar Edenhofer, Director of the Potsdam Institute for Climate Impact Research (PIK) and the Mercator Research Institute on Global Commons and Climate Change (MCC), issued a PIK Statement.
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COP27 world climate summit: “Results are not good enough”
11/22/2022 – A COP failure was avoided, but it was only a very moderate success for the climate. While 1.5 as a global goal is still there on paper, COP27 does not offer a concrete plan on how to achieve that. These are, in a nutshell, the assessments by PIK Directors Ottmar Edenhofer and Johan Rockström just after the 27th edition of the world climate summit COP concluded on Sunday in Sharm el-Sheikh, Egypt. Positive outcomes of the summit include a first-of-its-kind set up of a ‘loss and damage fund’ that shall aim at compensating climate impacts for developing countries.
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Finding equity in climate mitigation finance: new study in 'Science'
11/18/2022- Considerations of equity in directing global financial flows for regional climate mitigation investments are critically important. It is in the leading journal 'Science' that team of researchers led by the International Institute for Applied Systems Analysis (IIASA) and including the Potsdam Institute for Climate Impact Research (PIK) published a new study to help inform climate policy. The researchers explored how global investments could be divided among the countries in the world. The team applied a systematic approach with different equity and fairness considerations and estimated the “fair” financial flows between regions.
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World climate summit COP27: Potsdam researchers highlight need for action
11/11/2022 - Climate policy-makers and experts are gathering in Sharm-el-Sheikh at the world climate summit COP27, amongst them researchers from the Potsdam Institute for Climate Impact Research. The negotiations hosted by the United Nations also make media worldwide reach out to science.
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Fossil fuels threaten health and life: Experts call for massive acceleration of the energy transition
11/03/2022 - The consequences of climate change are one of the greatest health risks of our time. This was stated by the Federal Minister of Health and the President of the German Medical Association together with PIK Director Johan Rockström and the organisation German Climate Change and Health Alliance (KLUG), that had invited to the Federal Press Conference. Together they advocate accelerating the energy transition in Germany and minimising greenhouse gas emissions. The background to this is a recently published report by the leading medical journal The Lancet, which highlights dependence on fossil fuels as a threat to health and life. The experts highlighted the fundamental importance of the report for Germany and what has to follow from it politically and in the German healthcare sector.
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Economic losses from hurricanes become too big to be offset by the US if warming continues
10/17/2022 - Hurricane damages can increase due to increasing global temperatures, caused by greenhouse gas emissions from fossil fuels. Computer simulations of regional economic sectors and supply chains in the US now show that the resulting economic losses can at some point not be nationally offset under unabated warming. If too many factories and the like are hit by the hurricane and stop working, other countries will have to step in to provide the supply of goods, according to the scientists who did the study. The hurricane impacts under global warming will thus give the US an economic disadvantage, the warmer the more.
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Green hydrogen: Short-term scarcity, long-term uncertainty
08/09/2022 - Green hydrogen from renewable electricity and derived e-fuels are uniquely valuable for achieving climate neutrality. They can replace fossil fuels in industry or long-distance transport where direct electrification is infeasible. However, even if production capacities grow as fast as wind and solar power, the growth-rate champions, green hydrogen supply remains scarce in the short-term and uncertain in the long term, a new analysis published in the journal Nature Energy shows.
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How global trade can help the climate
06/24/2022 - The climate policy potential of international trade rules agreed by the World Trade Organization (WTO) still has room for improvement. Policymakers should change some rules - and make greater use of others, according to an article now published in the leading scientific journal Science by experts from twelve countries, including researchers from the Potsdam Institute for Climate Impact Research (PIK).
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How taxing the rich can help everyone
06/23/22 - Taxing rich peoples’ gains from capital can help reduce inequality while keeping up overall prosperity – yet only on two conditions. First, the revenues from taxation must be invested into public infrastructure such as schools, public transport, or sustainable energy grids. Second, it must be fairly possible to replace machines by labour. This is the outcome of a mathematical modelling study by a team of economists including US Nobel Laureate Joseph Stiglitz and led by the Potsdam Institute for Climate Impact Research.
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Emissions Trading for building and transport - new Ariadne analyses
06/22/2022 - The extension of the European Emissions Trading to the buildings and transport sector (ETS2) as a core element of the European Fit for 55 package has been the subject of heated political debate in the EU Parliament. Only recently, a compromise on ETS reform was reached. Two new studies by the Ariadne Project with the participation of PIK examine how fairness and solidarity can be preserved in the ETS 2 design.
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New PIK Podcast: Energy security crisis. Cost of living crisis. Climate Crisis. What's the way out?
06/17/2022 - We are in the middle of a global energy crisis. In the latest edition of the "Sustain Ability - The Potsdam Dialogues" podcast, Gunnar Luderer, Lead of the Energy Systems Research Group and Deputy Chair of the Department Transformation Pathways at the Potsdam Institute for Climate Impact Research (PIK), and Laura Cozzi, Chief Energy Modeler at the International Energy Agency (IEA), discuss what is needed to accelerate the clean energy transition away from fossil fuels towards renewables, especially with regard to the war in Ukraine and the resulting tensions between Russia and the West.
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Food sector emissions accounting: Sharing responsibility across the value chain
06/09/2022 - A new approach to account for emissions caused in the food sector that considers trade, as technical as it sounds, could help meet greenhouse gas reduction targets. Spreading the responsibility to reduce onto all countries along a product’s value chain could yield substantial effects, according to a study now published in Nature Communications.
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Climate Economics: Policies change People
06/09/22 - The makers of climate policy should rethink about how people think: A team of researchers led by the Potsdam Institute for Climate Impact Research (PIK) shows that abiding by climate-friendly policies actually changes the way people think about what they do. People’s preferences are more malleable than textbook economics often assumes. The researchers’ advice to policy makers is to take changing preferences into account when tailoring policies like carbon taxes or building low-carbon infrastructure.
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PIK-Scientist Svenja Fluhrer awarded with Early Career Best Paper Award
06/03/2022 - Development economist Svenja Fluhrer was awarded with the prize "Ökonomie des Klimawandels - Early Career Best Paper Award" of the Federal Ministry of Education and Research. She received the award for her paper "Sitting in the same boat: Subjective well-being and social comparison after an extreme weather event", published in Ecological Economics.
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PIK Director Edenhofer speaks at G7 summit
06/02/2022 - The G7 finance ministers met last week in Bonn and Königswinter to agree on common positions in areas such as climate action, ensuring economic stability and other pressing issues, and also sought exchanges with the scientific community. PIK director and climate economist Ottmar Edenhofer spoke at the summit on carbon neutrality and climate clubs.
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PIK experts appointed to Berlin's "Klimaschutzrat"
05/13/22 - Two PIK researchers, Cornelia Auer and Julia Epp, have been appointed to the "Klimaschutzrat" of the city of Berlin. The 18-member body with experts from science, business and representatives of civil society will advise the Berlin Senate and the House of Representatives on issues of climate mitigation and energy policy.
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German Prize for Economics of the Joachim Herz Foundation for Linus Mattauch
09/05/2022 - Every other year, the Joachim Herz Foundation honours scientists in interdisciplinary research in economics for their significant contribution to the further development of economic research. This year, the award aimed to honour scientists in the field of 'environmental economics'. Prof. Dr. Linus Mattauch together with his colleague Jiaxin Zhao was awarded third place with their paper 'When Standards have better Distributional Consequences than Carbon Taxes'.
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