Wunsch said the majority of Europeans were aware of the need to act but that it was important they were told the truth. The green transition represents a negative supply shock with costs similar to the energy shock witnessed in the 1970s that caused a huge rise in the price of oil, he said.
Carbon prices and the cost of greener sources will make energy in Europe five to eight times more expensive than in the U.S., he said.
Authorities should stop living in denial and explain who will have to pay for these higher costs if they want to retain credibility, Wunsch said. “Without credibility, the first concrete signs of emerging problems will encourage popular anger and protest.”
They should focus on cutting the regulatory burden in the case of climate rather than calling for more funding, Wunsch said. “Throwing massive amounts of money problems just to mitigate their effects is not a panacea.”