European Green Deal, Energy Transition & Greenflation Paradox: How public policies can produce new scarcity

Greenflation or inflation for green energy transition in Europe, it becomes a structural problem of new scarcity and poverty, because the Green Deal and its fiscal and monetary policies. In this paper, it is paid attention to the Green financial bubble and the European greenflation paradox: in order to achieve greater future social wellbeing, due to a looming climate risk, present wellbeing and wealth is reduced, causing a real and ongoing risk of social impoverishment. According to the European Union data, it is going to show the relations between green transition (emissions, tax, debt, credit boom, etc.), GDP and inflation. As many emissions are reduced, there is a decrease of GDP (once deflated) and GDP per capita, evidencing social deflation, which in turn means more widespread poverty and a reduction of middle-class. Also, there is a risk of a green-bubble, like in the Great Recession of 2008 (but this time supported by the European Union) and possible stagflation. To analyze this problem, it is used here some econometric tools, but under the theoretical support of heterodox approaches, especially the Austrian Economics and the New-Institutional Schools.