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Macroeconomic effects of measures to prevent global warming

Paper presented at "The Second Meeting of the International Society for Ecological Economics: Investing in Natural Capital
: Schön, M.
: Fraunhofer-Institut für Systemtechnik und Innovationsforschung -ISI-, Karlsruhe

Karlsruhe: ISI, 1992, 13 pp.
International Society for Ecological Economics - Investing in Natural Capital (Meeting) <2, 1992, Stockholm>
Conference Proceedings
Fraunhofer ISI ()
employment effect; global warming; input-output analysis; investment; macroeconomic modelling

To reach the goal of a 25 % reduction of CO2-emissions by the year 2005 within the old boundaries of the Federal Republic of Germany it will be necessary to invest several hundred billion Deutschmark for rational energy use measures and for interchanging fuels. As far as rational energy use is concerned, many of these measures will be economical because of savings due to reduced energy costs. Significant macroeconomic effects might result. In addition, the external costs of energy use, such as damages due to global warming as well as to other energy caused pollutants, will be reduced. A recently completed analysis by the Fraunhofer-Institute for Systems and Innovation Research (FhG-ISI) in cooperation with the German Institute for Economic Research (DIW) shows, that - if at all - only a slight decrease in economic growth can be expected, but that there will be significant structural changes (winners and losers among the industrial branches, in the energy and transportation sectors). Ove rall, a significantly positive employment effect will result from the analyzed measures.