Socioeconomic Effects of Ambitious Climate Mitigation Policies in Germany

Abstract

The EU Commission has introduced the instrument of National Energy and Climate Plans (NECP) to better achieve energy and climate policy targets. In Germany, a comprehensive study was commissioned for this purpose. Its methods and main results are presented here. It starts with a set of energy system models that maps the necessary changes in the energy system, together with corresponding measures bottom-up. The results then enter the PANTA RHEI macroeconometric top-down model as scenario inputs to determine the socioeconomic effects. According to the bottom-up models, achieving the target of 55% GHG reduction by 2030 will not be easy. The macroeconomic effects are mostly positive. Driven by additional investment, GDP and the number of jobs will be higher than in the baseline. The construction and service sectors can benefit from energy and climate policy measures. The share of final consumer expenditures on energy in GDP declines by 2030 compared to today. However, the direction and magnitude of the effects are not undisputed in the literature. The results show that ambitious climate policies are possible in Germany, which can also improve the achievement of economic and social goals.

Comparison of macroeconomic developments in ten scenarios of energy system transformation in Germany: National and regional results

“…Along the economic dimension, single scenario analyses comparing more ambitious scenarios to less ambitious business-as-usual (BAU) cases or a counterfactual scenario often show positive effects for gross domestic product (GDP) and employment in Germany [10][11][12]. Similar to the present analysis, Hartwig et al [13] couple a bottom-up energy model with a macroeconomic model to estimate the effects of an ambitious energy policy on GDP and employment.…”

Global Land Use Impacts of Bioeconomy: An Econometric Input–Output Approach

“…For some technologies such as nuclear and renewable energy deployment, additional assumptions are made in line with the recent IEA Stated Policies Scenario [55]. This approach is typically used in E3 models [56,57] and has similarities to the way hybrid multiregional input-output models combine data in monetary and physical units, but without econometric specifications for the behavior of agents [28,29,58].…”

Comparison of Macroeconomic Developments in Ten Scenarios of Energy System Transformation in Germany – National and Regional Results

“…The analysis is based on results from the macro-econometric input-output model PANTA RHEI, which was most recently used to estimate the socio-economic effects of the German Climate Change Act and alternative target paths (Lutz et al 2021a) and to model rebound effects in the energy consumption of industries (Lutz et al 2021b). The model's philosophy and properties as well as its applications are summarized in Lehr and Lutz (2020, pp 476-477).…”

“…For Germany, single scenario analyses comparing more ambitious scenarios to less ambitious businessas-usual (BAU) cases or a counterfactual scenario often show positive effects for gross domestic product (GDP) and employment (Sievers et al 2019, Lutz et al 2021a. At the EU level, transformation scenarios are also assessed in terms of their socioeconomic consequences by soft linking energy system models with macroeconomic models (Fragkos et al 2017, Vrontisi et al 2019).…”