Aligning growth and climate Protection

Contrary to what is often claimed, degrowth approaches do not lead to more climate protection. On the contrary: a deindustrialization of Germany or the European Union (EU) would significantly reduce the opportunities to contribute to climate protection. It is crucial for the success of the transformation that climate protection and economic growth go hand in hand. It is crucial to set the right path for the transformation of the economy as quickly as possible and to prevent deindustrialization, which would have a negative impact on both growth and climate protection. An effective climate policy can be achieved with the help of suitable framework conditions, in particular consistent carbon pricing, accompanying government measures and, above all, international cooperation. 

This study takes this as its starting point and identifies the relationship between economic growth and climate protection, shows which paths need to be set for the transformation of the economy and derives key policy recommendations from this.

The study shows that the decoupling of economic growth and CO2 emissions is possible but is not yet being achieved everywhere in the world. Growth and innovation are key drivers for the transition to a climate-neutral economy worldwide and enable Germany and Europe to play an active role in shaping global climate protection. Deindustrialization is likely to counteract Europe's contributions to climate protection and weaken its growth potential and influence. Economic growth is closely linked to people's living standards and secures jobs and tax revenues as the basis of the social market economy. It opens up scope for cushioning the social hardships of the climate transformation – a prerequisite for the acceptance of the transformation.

The following key recommendations for action can be derived from the study: 

• A reliable and effective framework for energy markets and climate protection must be created. 
• Affordable energy supply and security of supply must be ensured through limited state support, and ineffective regulations and bureaucracy must be reduced. 
• The growth potential of the German economy should be strengthened by increasing the volume of work, reforms in the social and education system and better integration of the capital markets.
• There is an urgent need to expand international climate protection cooperation through joint and binding institutions.

Read the entire study: ‘Aligning growth and climate Protection’ here as a PDF.