Mitigating the effects of climate change represents one of the major global societal challenges. In the framework of the COP21 held in Paris in 2015, the international community agreed to limit global temperature increases to less than 2 degrees Celsius by the end of this century. This requires drastic mitigation of greenhouse gas emissions. In addition, Germany has unilaterally adopted very ambitious goals in the context of the energy transition. To accomplish these national and international objectives, various political instruments have been implemented. Among them are the European Union Emissions Trading System (EU ETS) and the German Renewable Energy Sources Act (EEG). These instruments, generally speaking, raise energy costs for firms and thus provide incentives for energy conservation and for reducing the carbon content of energy used. However, concern has been raised that a unilateral increase in energy costs will weaken Germany’s competitiveness and result in decreasing market shares and exports as well as job losses in the affected sectors. The project TRACE, funded by the German Federal Ministry of Education and Research (BMBF) through the funding priority "Economics of Climate Change", provides a differentiated analysis of regional and sectoral challenges associated with the policy goal concerning decarbonization. The project, jointly carried out by the University of Mannheim, the ZEW – Leibniz Centre for European Economic Research and the Institut für Arbeitsmarkt- und Berufsforschung (IAB) explicitly deals with a societal dimension of that transition, by studying both quantitative and qualitative effects of climate policies on the labor market.

Further information on kooperationen.zew.de/en/trace/home.html