Green technologies bring economic growth

Declining competitiveness, slumping profits and weak company balance sheets: The domestic economy is currently facing enormous challenges. The study "Economic benefits of climate action for Austria - a synthesis" by the Wegener Center at the University of Graz on behalf of the Federal Ministry for Climate Protection shows that climate protection and innovation make a significant contribution to economic strength and also provide many additional benefits for society. What's more, climate protection and economic growth are not mutually exclusive - if cleverly designed - but are in fact mutually dependent.

The study shows that green technologies are an economic driver. If there is (continued) strong investment in the expansion of renewables, i.e. concrete investments to the extent of the current expansion target of EUR 4.5 billion per year by 2030, up to 100,000 jobs will be created and GDP will increase by up to EUR 9.8 billion.

Double dividend

The study speaks of a double dividend here: Growing GDP with a simultaneous reduction in CO2 emissions. This can be achieved with investments that flow into the expansion and conversion of energy generation, climate-friendly buildings, CO2-neutral transportation and efficient industry.

"Austria is a pioneer in the market for green technologies. With the subsidies for the transformation, we are strengthening the innovative power of our companies, securing our business location in the long term and protecting the climate at the same time. This must now continue - companies need predictability, especially in times of transformation."

Climate Protection Minister Leonore Gewessler

However, Karl Steininger and Olivia Koland, the authors of the study, also point out that a number of risks need to be taken into account. These include, in particular, the costs of inaction, international dependencies, questions of financing the necessary investments and the time dimension - i.e. taking measures in such a way that they have a timely and targeted effect.

"Anyone who hesitates when it comes to climate protection will have to dig deeper into their pockets in the long term"

Karl Steininger and Olivia Koland

The later the more expensive

"The later climate protection is implemented, the greater the stranded assets, and therefore the greater the loss of value." The direct costs caused by global climate change in Austria (damage caused by flooding, crop failures due to prolonged periods of heat or late frosts) already amount to at least EUR 2 billion per year.

By 2050, these will increase to at least EUR 6 to 12 billion per year. In addition, there are indirect economic costs, for example due to bad investments or a lack of innovation, and the costs of adapting to climate change.

Recommendations for action to achieve the pioneering role

The study also provides recommendations on how Austria can take on a pioneering role in climate protection through targeted measures and benefit economically at the same time. These include specific investment incentives and the strengthening of innovative power, which enable green lead markets and thus boost economic strength. Climate and Energy Fund Managing Director Bernd Vogl: "The study confirms our strategic positioning. Through our innovative funding formats, we support companies in bringing climate innovations to the market faster and on a larger scale. We want to expand this offer in the future in order to make an important contribution to the economy and climate in difficult times."

To the study

The study "Economic benefits of climate action for Austria - a synthesis" analyzed more than 50 studies from the last five years. These are macroeconomic and economically relevant analyses for Austria. It was commissioned by the Climate and Energy Fund under the direction of Karl Steininger from the Wegener Center for Climate and Global Change at the University of Graz. On 3.12.2024 as part of the event "Innovation in Dialogue: Climate Action as an Economic Driver?" event organized by the Climate and Energy Fund, it was presented to the public for the first time and the topic was discussed by a high-profile panel.

Link

The study is available for download at www.klimafonds.gv.at/wp-content/uploads/2024/12/Nutzen-Climate-Action_UNI-Graz_2024-11-29.pdf.