EU wants CO₂ neutrality: economy benefits, but major investments necessary!

EU wants CO₂ neutrality: economy benefits, but major investments necessary!

The European Union has set itself the ambitious goal of becoming CO₂ neutral by 2050. According to a comprehensive study by the Institute for Macroeconomics and Economic Research (IMK), the associated costs are comparatively lower than the potential economic damage caused by climate change. Overall, the transformation to a non-fossil energy system could even have long-term positive effects on the economy, especially if 170 billion euros are invested annually between 2027 and 2034.

The IMK also proposes the establishment of an additional investment fund at EU level to support the necessary transformations. In this context, it is emphasized that home-made credit-financed approaches are viewed as inadequate because they ignore the threat of climate-related damage. Global cooperation is seen as essential, but the EU investment fund could also significantly reduce transition costs.

Economic aspects of CO₂ neutrality

Scientists identify different scenarios regarding the implementation of climate policy. A positive scenario would be an ambitious international climate policy that could increase euro area GDP by around 1% between 2036 and 2040. On the other hand, a less committed approach in other countries would also lead to a strengthening of economic power in the EU. Despite the identified negative impact on GDP and inflation from CO₂ taxation, long-term inaction is considered to be far more serious.

As the taz reported, climate protection faces significant challenges. The market economy is strongly oriented towards growth and consumption, which leads to a high consumption of energy and raw materials. Private households could face increasing cost pressure as a result of higher CO₂ prices, especially if existing heating systems are not replaced. Many citizens also perceive the necessary compromises for climate protection as a competitive disadvantage and are skeptical about measures that could bring them personal disadvantages.

Financing issues and necessary investments

The financial requirements for climate protection are enormous. Estimates suggest an investment requirement of at least 600 billion euros over the next ten years, which corresponds to 60 billion euros per year. Some institutes even consider 100 billion euros to be necessary. This raises questions about financing, especially since the entire federal budget is currently around 450 billion euros. Experts like Ulrich Klüh advocate taking out loans to finance climate protection given the low interest rates.

The daily news highlights that European emissions trading will be extended to the buildings and transport sectors from 2027. This could again lead to higher CO₂ prices. A debate broke out about the debt brake and its abolition, with different political positions being heard. The Greens see climate protection as a “generational task” and are in favor of partial credit financing, while the conservatives want to stick to the debt brake.

In summary, it is clear that the path to CO₂ neutrality in Europe represents not only an ecological but also a massive economic challenge. Decision-makers must find the balance between necessary investments, economic impact and social acceptance. Otherwise there is not only a risk of high costs for future generations, but also an economic setback that would have even more serious consequences.