Designing climate policies

The role of households in the ecological transformation

The third event in the “Designing climate policies” series saw experts from academia and central banking discuss the role of households in the ecological transformation. Bundesbank Vice-President Claudia Buch introduced to the event, which was organised by the Bundesbank together with the Center for Liberal Modernity and the Potsdam Institute for Climate Impact Research.

The panel was made up of Karen Pittel, Director of the ifo Center for Energy, Climate, and Resources and professor at the Ludwig Maximilians University of Munich, Ralf Fücks, Founder and Managing Director of the Center for Liberal Modernity, Christian Kastrop, former State Secretary for Digital Society and Consumer Policy at the Federal Ministry of Justice and honorary professor at the Free University of Berlin, and Wolfgang Schuldzinski, Executive Director of the Consumer Association of the Federal State of North Rhine-Westphalia.

Claudia Buch used her introductory comments to stress that climate neutrality calls for a fundamental change in production methods and energy systems. “Household decisions on housing, mobility and consumption play a key role in this regard. But central banks, too, could support climate policy decisions within the scope of their mandate,” she explained. Policy measures to reduce carbon emissions will ultimately make carbon-intensive goods and services more expensive, relatively speaking. For these measures to be successful, market participants will need to identify relative price signals and act accordingly. One prerequisite for this is price stability, Ms Buch remarked.

The panel that followed, chaired by Annette Weisbach discussed how policymakers can help promote the ecological transformation and lay the necessary groundwork without losing the backing of the general public. The panellists agreed that the transformation costs have to be presented transparently to the general public and that redistribution issues should be given particular attention. Another major talking point was the extent to which household consumption and investment decisions are able to influence enterprises in terms of their production methods and supply of goods and how far households can contribute meaningfully to meeting climate objectives in the first place.  

In summer, the fourth event in the “Designing climate policies” series will take place with Bundesbank Executive Board member Sabine Mauderer. The exact date of this event as well as all further details will be published on the Bundesbank’s website.