all projects

Accelerated climate protection does pay off

Client

INSM Initiative Neue Soziale Marktwirtschaft GmbH

Year

2023


An accelerated expansion of renewable energy sources and the increased use of efficiency technologies in industry reduce wholesale electricity prices and increase economic growth. This is the result of our short study for the Neue Soziale Marktwirtschaft Initiative (INSM).

Every stimulus has a positive effect on economic performance

If the expansion of renewable energies and the implementation of efficiency measures are accelerated, the amount of fossil fuel that has to be imported is decreased. In terms of efficiency measures in industry, fossil-fuel applications are often replaced with more efficient power applications. Therefore, while electricity consumption is increasing, through the expansion of renewable electricity generation this also means that wholesale prices will fall by 2030.

An acceleration on this scale will require additional investment in plants and buildings. But these measures also “pay off” economically – in addition to their necessity for climate protection. In the simulation period up to 2030, supported by lower electricity prices and reduced energy imports, the German GDP increases by around 1.7 euros for each additional euro invested. If all measures are implemented in 2030, the gross added value is four percent above reference development level. The prerequisite for this: the necessary additional work can (primarily) be realised by extending the working hours.

As a result, the acceleration measures will reduce the price of electricity and energy source imports, and increase investment. Every stimulus has a positive impact on economic performance in Germany.

Increased investment in renewable energy & energy efficiency

In order to achieve the goal of climate neutrality in Germany by 2045, the expansion of renewable energies and the implementation of efficiency measures in industry will have to be accelerated. This will require additional investment of around 400 billion euros by 2030. Our short study for the INSM examined whether these investments are also worthwhile in economic terms.

We evaluated existing energy scenarios and adapted them to current price developments. The short study compares a “reference scenario” and a “target scenario” with accelerated development. The “interim target year” of 2030 was selected as the time scale, a step on the way to climate neutrality in 2045.

For this short study, our team used two models: our electricity market model was used to calculate the development of wholesale electricity prices. The economic impact was measured using our macroeconomic model.

Links and downloads

On the INSM’s website you will find:

The study (PDF, in German)

Further information on the study (in German)

Project team: Dr Almut Kirchner, Dr Andreas Kemmler, Marco Wünsch, Jan Limbers

Last update: 6.3.2023

Do you have questions?

Your contact at Prognos

Dr Almut Kirchner

Partner, Director

View profile

Marco Wünsch

Principal

View profile

Jan Limbers

Senior Expert

View profile

Mehr Studien & Projekte zu diesem Thema

More studies & projects on this topic

Guest article in SPIEGEL: How Europe's economy can catch up with the USA and China

2024
| Expertise

A race to catch up - this is what Europe needs if it is not to be left behind by the USA and China. In the SPIEGEL guest article, Christian Böllhoff calls for a new match plan with clear priorities for the new EU legislative period.

Significance of the German economy for Europe

2024
| Project

Growth in the German economy benefits the whole of Europe. Our study for the vbw shows that this is due to the size of the economy and its strong foreign trade networks.

Study on Poverty and income inequality in the context of the digital transformation

2024
| Project

The study for the European Commission examines the impact of digitalisation on the employment situation in the individual member states as well as on the EU economy as a whole.

Guest article in WirtschaftsWoche: "Move Europe - it's urgent!"

2024
| Expertise

In his guest article "Move Europe - it's urgent!" in WirtschaftsWoche, Christian Böllhoff calls for Europe to reposition itself geo-economically in order to strengthen its position between the economic giants USA and China.

Germany: Industry sectors put to the test

2024
| Expertise

Mechanical engineering, the automotive industry, pharmaceuticals: In which sectors is Germany still a leader? On behalf of the Handelsblatt, we examined how successfully Germany is holding its own against its international competitors.

Future-proof strategies for Europe

2024
| Project

Germany and Europe are trying to find their place in the New World Order. Prognos examined four foreign trade strategies for the vbw.

Five challenges: How Europe remains competitive in the future

2024
| Expertise

What needs to happen for Europe to survive in global competition? We analysed this at the “12 Minutes Europe – Meeting Global Challenges” event organised by the Austrian Federal Economic Chamber.

The invisible value of care work

2024
| Expertise

72 billion hours: That is how many unpaid care work hours are performed in Germany, annually, by women. In a new paper, we show the value of unpaid care work and how unevenly it is dis-tributed between men and women.

Innovation Index Germany 2023

2024
| Project

Once again, Prognos has compiled the Innovation Index Germany on behalf of the Vodafone Institute for Society and Communications. The index quantifies the impact the expansion of Germany’s digital infrastructure has had on its innovation strength.

Regional purchasing power of pensions

2023
| Project

Where in Germany is retirement particularly cheap and where has it become more expensive than average? Prognos examined this for the German Insurance Industry Association.

About us

Prognos – Providing Orientation.

Prognos is one of the oldest economic research centres in Europe. Founded at the University of Basel, Prognos experts have been conducting research for a wide range of clients from the public and private sectors since 1959 – politically independent, scientifically sound.

Learn more