ENGAGE.EU is proud to share a position paper, which is the outcome of one of the international teams formed during the first ENGAGE.EU Think Tank held in September 2022 in the University of Mannheim. The paper proposes a policy response to dealing with the problems of increased inequality and a rise in carbon emissions that can be a negative effect of automation and digitalization projects. The team included Assist. Prof. Filippo Bontadini from the Luiss Guido Carli Free International University for Social Studies (LUISS), Assoc. Prof. Monika Moraliyska from the University of National and World Economy (UNWE) and Prof. Klaus Prettner from Vienna University of Economics and Business (WU). They started a discussion on a possible research paper on the sustainable way of digital transformation. Later on, other scholars from universities and research institutes in Austria, Portugal, and the United States joined this effort –  Ana L. Abeliansky, David Bloom, Emanuel Gasteiger, Pedro Mazeda Gil, Michael Kuhn, and Catarina Peralta. The final result of their work, which took the form of an expert opinion, was published in the VoxEU section on the web site of CEPR, Europe’s leading network of Economic Policy Researchers. Below the article we welcome you to give comments, ask questions or suggest further research topics. 

Fostering a sustainable digital transformation

Automation and digitalisation are progressing rapidly worldwide, auguring improved productivity and living standards but also the prospect of genuine social harm. This column discusses two side effects of automation – increased inequality and a rise in carbon emissions – and proposes a policy response to deal with both problems simultaneously. By imposing a higher tax on automation-driven emissions and redistributing the proceeds so as to mitigate increased inequality through education and re-training, such a policy could reduce resistance to new technologies, increase skill levels, and foster the transition to cleaner electricity production.