Climate protection investments
for the transformation
of the energy system

Over the next 10 to 15 years significantly more will have to be invested in climate change mitigation than ever before. These are the results of our calculations for the Federal Ministry for Economic Affairs and Climate Action (BMWK).

Significant investments arising in buildings and the energy system

Core results:

• For the transformation of the German energy system to achieve net zero by 2045, significantly higher levels of investment will be necessary in the coming years than previously.
• The majority of this investment will be required over the next 10-15 years, primarily, in the buildings and energy sectors.
• Energy sector: Along with electricity produced using renewable energies, the grids themselves also require significant investment.
• Buildings: The need for investment is here is shown to be extremely high. The relevant commodities (buildings, heat generation), however, are very durable. Examined along the whole lifespan, the energy costs that are saved offset the additional investment.
• Transport: Additional investments to mitigate climate change are low compared to other sectors and the high energy savings in energy costs mean that climate protection investments are usually cost-effective.
• Industry: The required investment in the industry sector is relatively low compared to other sectors. For a successful transformation, however, this will have to be increased by a factor of 2 to 2.5 compared to the year 2020. As a result of the imperative use of hydrogen, additional higher energy costs are incurred in some sectors.
• The average annual investment for climate protection rises from around 50 billion euros for the 2015-2020 period to around 150 billion euros per year in 2030. This represents around a 4% share of GDP. For comparison, the GDP share for health expenditure is currently around 13%. Investment requirements for climate mitigation decrease after 2035.
• Through climate protection investments, the import of fossil fuels and the expenditure for energy is significantly reduced.

Our approach

The aim of the study was to estimate the necessary climate protection investments for the restructuring of the capital stock for net zero. Two transformation pathways were examined: The first was based on the climate goals for 2030 and 2045. The second pathway was based on maintaining the 2020 regulatory situation and achieved a reduction in greenhouse gases of around 80% by 2045 in comparison to 1990.

Climate protection investments were broken down by sector and technology to present the required investments over time in a detailed manner. In addition, the study compared climate protection investments with savings in energy costs and investigated to what extent investment could be offset by these savings.

The (additional) investments for climate protection and the savings in energy costs alone do not make an estimation of the impact on economic development in Germany possible. This would require macroeconomic modelling, which takes into account the feedback and interactions within the economy as well as abroad. This analysis will be examined in a parallel project together with the Institute of Economic Structures Research (GWS).

Links and downloads

To the study (PDF in German)

Project team: Dr Andreas Kemmler, Dr Almut Kirchner

Latest update: 18.07.2024