Germany’s business model 2023
Why politicians and companies need to act consistently - and how they can do so. Joint study with BayernLB.
KfW development bank (KfW)
NEXTRA Consulting and Institute for Sustainable Investments
In principle, it is possible to implement the long-term transformation of climate-relevant systems and processes necessary to achieve climate protection goals with technologies already known today. However, transformation requires significant rethinking and private and public investment – especially into climate-friendly technologies that permanently reduce greenhouse gas emissions.
On behalf of KfW, Prognos, together with NEXTRA Consulting and the Institute für Nachhaltiges Wirtschaften (the institute for sustainable investments), submitted a study in 2021 which, for the first time, quantified the total investment in climate protection and divided it into sectors and subjects.
On this basis, we have now calculated the public share of these necessary climate protection investments in another short study.
The previous study quantified the necessary investment in climate protection to achieve climate neutrality in Germany by 2050 (see Prognos et al. 2021). This was broken down into total and additional investments as well as by sectors of the energy balance sheet and subjects (among others, building efficiency, renewable energy plants, process technology, vehicles, and transport infrastructure). On the basis of this, the present study quantifies the (proportional) volume of public climate protection investments up to 2050 by sector and by subject (where possible and reasonable).
The breakdown is based on the institutional framework found in the respective sector/subject, as well as on the evaluation of statistics and other sources. Unless the allocation of the investor is directly clear, estimates are made based on appropriate analogies, such as in the housing sector by means of calculating the public share of the relevant capital stock as a whole.
Public investment requirements to achieve climate neutrality in Germany by 2045 can be estimated at just under 500 billion euros, equivalent to an average annual investment in climate protection of around 20 billion euros.
The largest government needs will be in the energy (297 billion), transport (137 billion), and building (47 billion) sectors. These amounts are fundable via public budgets, but at the same time this would represent a six-fold increase in the current level of investment. In order to increase the required climate protection investments in the long term, it is necessary to strictly adapt the responsibilities, financial flows, and competences between the federal, state, and local levels.
On the KfW website you will find:
Project team: Jan Limbers
Latest Update: 22.07.2022
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