Madrid III. A professor of macroeconomics, monetary economics, and fiscal policy at Carlos University, Evi Pappa argues for public incentive policies that help companies shift to a clean, green transition while guarding against inflation. This transition, paired with sound financial measures, could boost the competitiveness and productivity of firms located in regions marked by economic growth, and it would support the expansion of green energy production. The abundance of sustainable resources, such as sunshine in Alicante, strengthens the case. “If we want to go green, we must seriously consider how to balance power to encourage companies to generate their own green energy,” Pappa stated.
Pappa participated in the workshop edition titled “Macroeconomic Risks and Policies,” a collection that includes the Fundamentals of Economic Analysis chapter from the University of Alicante (FAE). Economists from leading academic institutions and collaborators from government and European central banks shared their work on today’s economic challenges. [Citation: UA workshop proceedings]
He explored his research on the green transition and its effects on the economy under the theme “The green metamorphosis of a small open economy,” describing Europe as a green island with substantial potential for solar power. Regions like Levante and the province of Alicante stand out for their solar opportunities. [Citation: Conference materials]
“If the government invests in green energy infrastructure, it will raise industry efficiency and strengthen the business sector. In the long run, energy prices could fall, and the impact on products could approach zero. Companies become more efficient and competitive,” commented the Greek expert on fiscal policies during the green transition. [Citation: Expert remarks]
According to Professor Carlos III, responsibility for this transition rests with both governments and corporate leaders who must invest now to fortify their future position against competitors. Southern countries enjoy the advantage of high solar peaks that enable sustainable and inexpensive energy production. [Citation: Policy discourse]
avoiding inflation
To achieve this, appropriate fiscal policy is essential. Pappa notes that taxing only fossil fuels would likely drive inflation higher. He emphasizes the need for incentives, subsidies, and policies that stimulate the business and industrial sectors, while acknowledging that managing the costs requires a careful approach. [Citation: Policy analysis]
Yet he warns that the financial cost must be borne. He argues that investing in green capital and infrastructure should be funded through borrowing, and it is feasible to do so without triggering inflation if markets are assured that the transition will be effective. [Citation: Economic strategy]
The expansion of renewable energy is setting global records, but coal and gas still dominate. Spain could lead in this shift thanks to favorable climate conditions, aligning with neighboring countries such as Portugal and Greece. Still, Europe remains far from a state free of fossil or nuclear fuels. [Citation: Energy outlook]
“At present, capacity is insufficient. Spain, Portugal, Greece, and Denmark are still too small to meet Europe’s needs. The energy crisis in Germany and rising prices illustrate this gap,” he observes. He views this situation as a potential incentive to model a more robust regional approach. [Citation: Regional energy analysis]