Thiemo Fetzer
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Thiemo Fetzer
@trfetzer.com

Professor of Economics at Warwick University and at University of Bonn. Visiting Fellow LSE, Fellow/Affiliate with NIESR, CESifo, CEPR. European Research Council Grantee. Data Science, Econ, AI, ML, Networks.

Thiemo Fetzer is a German economist and professor at the University of Warwick and the University of Bonn. His research focuses on applied economics, political economy, and economic development, with a particular emphasis on the use of artificial intelligence, data science, and machine learning methodologies. Fetzer's work has contributed to major policy discussions and has received coverage in both national and international media outlets. .. more

Economics 36%
Political science 20%

CBAM already nudges trading partners to adopt carbon pricing. Turkey’s new climate law is a sign. The system’s core logic works: it’s not about EU decarbonising alone, but driving global change.

Fuest is drawing a lot on an example of a single company that may be "forced" to move to Turkey. THe example ignores CBAM’s design: it will expand coverage over time. A temporary loophole doesn’t prove the system is broken; it shows the policy is evolving.

The real hurdle isn’t technology; it’s EU institutions. Without a pan‑European fiscal and data capacity, CBAM can’t fully deploy. The OECD is stepping in, but Europe must build its own data hub to succeed.

Smart supply chains embed metadata into every transaction. Compliance becomes a by‑product of the infrastructure, cutting costs instead of raising them. CBAM’s future is a frictionless, data‑driven system.

G20 moves to invoice‑level VAT and real‑time e‑invoicing. That creates a public data layer that feeds CBAM’s carbon estimates. Verification can be automated, so the image of manual checks is outdated.

Today’s opaque supply chains are becoming transparent. AI and digital passports can estimate CO₂ in seconds. The war with Ukraine increases transparency needs. The cost of compliance falls as tools spread, turning CBAM from a bureaucratic nightmare into a low‑cost, real‑time solution.

Clement Fuest recently critiqued the EU’s CBAM, saying it’s too costly and unworkable. I see a different picture: technology is shrinking costs, and the system can scale with digital tools. Let’s unpack why the critique misses key points.

I probably should add that I have deep concerns that this dimension is one that has been weaponized as well (think of that presidential history writing on the historical unity of the…). I would like to think that Germany has one of the better ways of dealing with „messy“ history

A Supply chAIn octopus https://t.co/uVqZtQyzsa

Added bonus: a week later they may be convinced of the opposite. For a few days.

One network, to rule them all...

Network knowledge is key. AIPNET builds a production‑network graph via AI retrieval, revealing nodes like gallium that drive trade tensions. Knowing the graph lets policymakers target interventions precisely. For more: aipnet.io

Reposted by Thiemo Fetzer

indeed, the nation needs builders, electricians, carpenters not lawyers and accountants... the only challenge is: soft and hard societal status programming needs to change big time to make that transition happen.

AIPNET gives that map. Use it to target subsidies to high‑spillover nodes, speed green tech adoption, and shape industrial policy. Learn more about the AIPNET on aipnet.io.

AIPNET builds a production‑network graph to spot critical inputs like gallium and track China’s rising centrality. Bottom line: knowing the network lets you move up the instrument ladder—from blunt quotas to precise taxes—just as a monopolist refines pricing with consumer data.

if bargaining power shifts, quotas are better. You need to know the network. Network knowledge is the game changer. The paper shows that better maps of who is linked let policymakers pick the right tool—linear taxes, quotas, or nonlinear schemes—matching shock patterns.