‘I cannot think of a more classic market failure than excessive CO2 emissions’

De Groene Amsterdammer
Sandra Phlippen, Assistant Professor at Erasmus School of Economics

The energy consumption of the Netherlands must be transformed, with major consequences for the labour market. Because what will happen to the employees of the fossil industry? After all, although politicians are right to emphasise that the energy transition will generally have a positive impact on employment, a lot of jobs will inevitably lost as well. Sandra Phlippen, Assistant Professor at Erasmus School of Economics and Head for the Netherlands at ABN Amro’s Group Economics, discusses among others the role of the government in an interview with De Groene Amsterdammer.

Phlippen believes that the government, and not the industry, is responsible for taking care of the employment losses caused by the energy transition: ‘I cannot think of a more classic market failure than excessive CO2 emissions. And the government has a role to play when a market fails. Moreover, companies already contribute a great deal in the form of unemployment premiums and transition allowances.’

Furthermore, Phlippen argues that the government should be strict with the fossil industry, which receives more than seven billion euros in subsidies every year. ‘By using subsidies they artificially maintain something of which it is known that in the long term it is not viable. It is better to be hard and clear and to compensate the climate-losers with funds and projects. The government’s debt may well be allowed to increase for this. In the short term it costs a lot of money, but then we can put a stop to many persisting problems. In that case, we will certainly not rule out an increase in prosperity. In forty years’ time, a sustainable economy will provide much more than a fossil one.’

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Read the entire article of De Groene Amsterdammer, 31 July 2019 (in Dutch).