Corona has had only a minimal impact on global warming, but has massively overshadowed climate policy work! The necessary structural transformation of the Austrian economy is more urgent than ever in autumn 2020.
On 9 September 2019, the scientific community presented the National Energy and Climate Plan (Ref-NEKP) for Austria, developed by researchers as a reference document, setting out how our country can ensure its contribution to achieving the Paris climate targets, and how the transition to a near-greenhouse-gas-emissions-free and climate-resilient economy and society can be achieved. What path has Austria been on since then, and what is needed to tackle the climate crisis?
The 2019 Reference Climate Plan and its reception
In 2019, over seventy experts in climate and transformation research developed a reference plan as a basis for a scientifically sound National Energy and Climate Plan for Austria (Ref-NEKP) that is consistent with the Paris climate targets. This was publicly presented on 9 September 2019 and submitted to the National Climate Protection Committee (NKK).
The central aim was to support the critically necessary improvements in the official NEKP for Austria that were needed by the end of 2019 for the success of climate protection from 2021 to 2030. Whilst the scientific Ref-NEKP broadly contributed to shaping public opinion in Austria as a factual basis and likely fed into the government programme to some extent, the immediate short-term goal was almost entirely missed: the impact on the NEKP finally submitted by the Bierlein government was marginal. The plan even acknowledged that the planned measures would not be sufficient to meet Austria's emissions reduction targets.
Ongoing climate change is costly
We are currently facing weather- and climate-change-related consequential damages in Austria averaging 2 billion EUR per year. This is at a global average temperature around 1 degree above pre-industrial levels. Even if it proves possible to limit this rise to 2 degrees on a global average, damages in Austria are set to increase to an average of at least 3 to 6 billion EUR per year by 2030, and to 6 to 12 billion EUR by 2050 – on average, every single year.
Corona and climate change
Stabilising the climate requires a net-zero emissions balance with over 90% reduction in fossil emissions. Whilst the reduction in economic activity caused by the Corona-related lockdown did temporarily lower emissions, it brought about no structural change that would bring us closer to the deep emissions reductions that are necessary. Because these require changes in economic framework conditions, and in production and everyday behaviour.
What the experience of the Corona crisis can teach us:
- keeping the (emissions) curve flat is just as crucial when it comes to climate change – waiting means losing the ability to prevent dramatic consequences;
- significant course correction is possible when it is collectively supported by everyone, and the current crisis offers the state particular opportunities;
- the economic and social damages associated with further rising climate change manifest more slowly than those of the COVID-19 pandemic, but are more massive and more permanent in the medium term.
The mood barometer from the University of Klagenfurt and the WU shows that a large majority of the Austrian population continues to want measures that address the potentially far more severe climate crisis.
Ramping back up as a recovery programme
Public expenditure and investments such as those envisaged in the economic stimulus and relief packages are only economically justified if they simultaneously generate a sustainably healthy economic structure. To use an analogy: a patient in crisis might find short-term relief through increased doses of medication, but lasting recovery is only possible through a proper recovery programme. The recovery programme for the economy consists of permanently building a climate-resilient, circular economy based on short supply chains. This can be achieved on the one hand through targeted public investment with an eye on the requirements of the situation in 2030 and 2040, and on the other through a reform of the regulatory framework that aligns incentives for businesses and households.
The Covid-19 crisis offers a particular opportunity to shape state policy in favour of sustainable structures, and to do so at lower financial, social, and political costs than would probably ever have been possible otherwise. Fossil energy prices at their currently low levels make it easier to phase out environmentally harmful subsidies, but also to bring forward the planned introduction of CO2 pricing.
The European Union's climate pathway
The European Parliament will set the EU's new climate targets for 2030 in September 2020 – targets aligned with the Paris Agreement under the European Green Deal. The European Commission is proposing an increase in emissions reduction targets for 2030 (relative to 1990) from the current 40% to 50–55%, with several parliamentary groups pushing for 65%, which is scientifically justified. This would give a 50% chance of achieving the 1.5-degree target. National targets are then to be adjusted accordingly.
What is now needed in Austria
If Austria wants to make its adequate contribution to achieving the Paris climate target, whilst also making smart use of the innovation opportunity that arises precisely in the post-Corona recovery, it should focus in particular on the following elements:
- Reform of climate-policy-counterproductive subsidies. We are currently using public funds to subsidise fossil-fuel-driven behaviour, the consequences of which we then have to repair using further public resources. Particularly in one of Austria's biggest areas of concern – transport – we spend at least around 4 billion EUR per year in
public support and subsidies that are counterproductive both socially and in terms of environmental policy.
- Introduction of effective CO2 pricing. From our everyday lives, we know that our shopping behaviour is significantly shaped by the prices of goods. This applies even more strongly to business decisions regarding the choice of inputs in production. The counterarguments of "loss of competitiveness" or "social injustice" can not only be addressed through appropriate design (border adjustment tariffs, use of revenues), but can actually be turned into drivers of a more socially and environmentally just development.
- Involving everyone in the redesign. Concepts exist for the cross-sectoral transformation of key economic sectors; agriculture and forestry are feeling the need for transformation; the energy and transport sectors are already changing; the financial sector is increasingly on board; science is well prepared; the population is willing; and almost all political parties are open to change. Austria needs a national coming-together, like the one that once united the country in the fight for a nuclear-energy-free Central Europe.
One year after the publication of the Ref-NEKP, there are encouraging approaches in Austria – now implementation needs to happen quickly to ensure Austria's contribution to the Paris targets.