Volume averaged between €4.1 and €5.7 billion per year in recent years

A recent WIFO study examines which subsidies with negative climate impacts exist in Austria. On average over recent years, the volume of climate-counterproductive subsidies in Austria amounted to €4.1 to €5.7 billion annually.

For decades, the identification and reform of subsidies with negative climate impacts has been discussed at the (international) policy level and in academia. Such subsidies undermine climate protection efforts, contradict the polluter-pays principle, and reinforce market distortions and "carbon lock-in".

Based on a literature review of international studies, the paper summarises the findings of a comprehensive bottom-up analysis of direct subsidies and fiscal measures (indirect subsidies) granted at the federal level. The focus is on the areas of energy generation and use, transport, and agriculture. The analysis takes into account both the legal basis and original rationale for the subsidies, whilst also quantifying the respective subsidy volumes and identifying the beneficiary groups.

In addition to quantifying the subsidy volume for predominantly indirect subsidies (e.g. commuter tax allowances, energy tax exemptions and reductions), relevant regulatory frameworks with subsidy characteristics (e.g. parking space obligations) are also examined. Taking into account environmental effectiveness, economic criteria (such as distributional effects) and possible legal restrictions, reform proposals are developed for the selected subsidy measures.

All details and publications available at: wifo.ac.at