Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/229644
Authors: 
Schütze, Franziska
Stede, Jan
Blauert, Marc
Erdmann, Katharina
Year of Publication: 
2020
Citation: 
[Journal:] DIW Weekly Report [ISSN:] 2568-7697 [Volume:] 10 [Year:] 2020 [Issue:] 51 [Pages:] 485-492
Abstract: 
By developing a taxonomy for sustainable investments, the EU Commission has created the first standardized criteria for climate-friendly economic activities.To achieve the goal of climate neutrality by 2050, firms and investors must be well informed of which investments avoid greenhouse gas emis- sions and can thus be categorized as sustainable. The present report investigates to what extent the EU taxonomy achieves this goal. The study reaches the conclusion that the criteria are compatible with a path to climate neutrality in some economic sectors, such as the automotive sector. However, in others, such as the emission-intensive basic materials sector, the cri- teria are insufficient. Thresholds that are too low carry the risk of a carbon lock-in, the entrenchment of emission-intensive technologies and structures. Instead, the EU taxonomy should offer incentives for innovations in decarbonizing the economy. This can be achieved by setting different thresholds for new investments and existing assets, as the EU taxonomy already does in the buildings sector.
Subjects: 
EU taxonomy
sustainable finance
green finance
green investment
energy transition
financial decarbonization
financial markets
JEL: 
G00
G14
G18
G38
Q01
Q54
Q56
Persistent Identifier of the first edition: 
Document Type: 
Article

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