03 Feb 2022, 12:36
Jessica Bateman

Economists split over direct economic benefits of German energy transition

Clean Energy Wire

Germany’s leading economic research institutes have not come to a consensus on what the economic benefits of the energy transition may be. At a conference held by the Leibniz Institute for Economic Resesrch (ifo), financial market researcher Jan Pieter Krahnen described the country’s climate plans as “too expensive.” ifo president Clemens Fuest stated that "out of every 100 euros we spend [on the transition], maybe one or two euros will benefit us."Decarbonisation might thus increase global prosperity, but economic growth in Germany could slow, with repercussions already felt in lignite regions and rising energy prices, the researchers said.
In contrast Marcel Fratzscher, the President of the Berlin DIW Institute, described the transition as "a growth engine" adding that should not just be measured in material goods. However, he added it will only be successful if there is social acceptance. Achim Wambach of ZEW in Mannheim said economic growth is not the only measure that should be looked at and that employment rates should be taken into consideration.

The current traffic light coalition government consisting of the centre-left SPD, the Greens and the pro-business FDP has put the promise that a climate-friendly transition can also lead to economic growth at the heart of its policy-making.

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