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Climate Policy Initiative Opens Center at DIW Berlin

November 11, 2009

BERLIN, GERMANY — A new research center devoted to the evaluation of climate policies opens today in Berlin. The center is a branch of the Climate Policy Initiative (CPI), an international research organization funded by George Soros. The Berlin center is the first regional office of CPI to be up and running; additional centers are planned for Beijing, New Delhi, Rio de Janeiro, and Venice. Housed within DIW Berlin, a leading German economics research institute, the center will collaborate closely with the institute’s resident economists.

The Climate Policy Initiative, headquartered in San Francisco, will be primarily devoted to evaluating the efficiency of local, national, and global climate policies. Key research questions will be: What effects have climate policies had thus far? And how can we make them more effective? A wide range of policy instruments are used to promote climate protection, including regulations, market incentives, and government subsidies – both at the national level and inter-nationally. The upcoming Climate Change Conference in Copenhagen highlights the need to understand how these policies work and how they can be improved.

“The CPI will study climate policies in order to help governments and international organizations improve them,” said Professor Thomas C. Heller, the founding director of the CPI. “We must identify flaws in the implementation of such policies early on if we hope to achieve climate protection goals.”

Prof. Heller, who has been an economist and law professor at Stanford University since 1979, is an expert on international climate control, and global energy use, and the interaction of government and nongovernmental organizations in the developing world.

“We’ll be investigating the incentives, subsidies, and framework conditions that households and firms need for climate friendly development. This, in turn, will enable us to develop appropriate policy instruments,” Dr. Karsten Neuhoff, the director of Berlin’s new CPI center, said. “It’s an exciting challenge, and one that we look forward to addressing together with economists, policy makers, business leaders, and financial experts in Berlin and Europe.

As an economist at the University of Cambridge, Dr. Neuhoff previously directed several projects in the areas of energy markets, emissions trading, and technology policy. The CPI team in Berlin is also composed of two additional members: Alexandra Novikova and Ferdinand Vieider. Novikova, an environmental scientist, co-authored the current IPCC assessment report. The economist Ferdinand Vieider was previously at the University of Rotterdam, where he conducted empirical studies of decision-making processes.

“The opening of the very first CPI center at DIW Berlin is a great honor for us,” said Dr. Alexander Fisher, the managing director of DIW Berlin.  “The CPI is aimed at promoting rigorous and effective policies that are grounded in solid scientific research. For this reason, DIW Berlin and the CPI are a perfect match.”

The opening of the CPI center underscores the status of the Berlin-Brandenburg region as a major location for research on climate change and environmental protection. The CPI center joins other cutting-edge research institutes already working in the region, including the Potsdam Institute for Climate Research (PIK) and the Department for Energy, Transportation, and the Environment at DIW Berlin, which is headed by Prof. Claudia Kemfert.

A two-day international conference is being held in Berlin in order to inaugurate the new CPI center. Less than a month before the UN Climate Change Conference in Copenhagen, the opening event for the center is dedicated to the role that subsidies play in promoting or hindering climate protection.

The Climate Policy Initiative is being funded by the Soros Foundations Network, a philanthropic organization founded by the billionaire financier George Soros. The CPI is a non-profit organization dedicated to the research and evaluation of climate policies and is independent from the other initiatives of the Soros Foundations Network.

Berlin’s CPI center – The first research topics

The upgrading of building insulation has the potential to be the greatest source of energy savings. The CPI team will investigate which political instruments can best help to promote insulation upgrading. Europe has pledged to increase the share of energy it generates from renewable sources to 20% by 2020. The CPI team will investigate whether the steps necessary to achieve this goal are being taken.

The European Emissions Trading System creates incentives for the industrial and financial sector to take the climate impacts of investments into account. The CPI team will study the implementation of emissions trading (auctions, the CDM), particularly with regard to international development and cooperation.

CO2 prices can only contribute to emissions reductions if energy consumption is not simultaneously subsidized. The participants of the G20 conference in Pittsburgh acknowledged that energy subsidies need to be abolished. The effects of subsidies as well as options for their reduction is the subject of the CPI center’s inaugural conference.