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Climate action costs money: new heating systems, new electricity grids, new machinery, new production processes. But this does not mean that climate action is bad for the economy – quite the opposite. After all, our current energy system also costs enormous sums of money. Europe imports oil and gas worth billions, businesses are exposed to fluctuating energy prices, and the climate crisis is already causing significant damage. At the same time, new markets and jobs are emerging worldwide in the fields of renewable energy, storage, electricity grids and climate-friendly technologies. 5 reasons why climate action is good for the economy.
1. Climate action reduces costly oil and gas imports
The European Union is heavily dependent on other countries for its energy supply. According to Eurostat, 57 per cent of the EU’s energy requirements were met by net imports in 2024. This cost the EU Member States around 376 billion euros, according to Eurostat. The imports consisted mainly of fossil fuels such as crude oil, natural gas and coal.
In Austria, too, around 53 per cent of the energy required came from abroad in 2024. Dependence is particularly high when it comes to fossil fuels. Almost 96 per cent of oil demand and 92 per cent of gas consumption were imported.
The cost of fuels and energy from abroad amounted to around 14 billion euros in 2024.
A large proportion of these billions flows to countries outside the EU. With wind and solar energy, the situation is different: wind and sun cost nothing. Money is needed primarily once, for the construction of the installations. After that, wind turbines and solar panels supply electricity for decades
The energy crisis from 2021 onwards – which was drastically exacerbated by Russia’s war of aggression – and the war with Iran in 2026 in particular highlight the consequences of this dependence: energy prices in Austria rose dramatically.
2. Those who save energy or generate it themselves pay less
Climate protection is not just about replacing fossil fuels with renewable energy. A key part of it is ultimately requiring less energy to achieve the same output.
This also translates into tangible savings for businesses: more efficient machinery, better insulation or heat recovery from machinery (heat generated that would otherwise be lost is used, for example, for heating) improve the production process. Less electricity or fuel is then required to produce the same quantity of goods.
A 2026 OECD study also shows that particularly energy-efficient companies are often more productive.
Although a new machine or heating system usually costs a lot of money to purchase, over its entire lifespan, a system that requires less energy reduces energy costs.
However, businesses can not only save energy but also generate it themselves. A solar panel system on the roof of a factory building or warehouse supplies electricity that the business no longer needs to purchase. This reduces the electricity bill and makes businesses less dependent on fluctuating energy prices.
3. Climate action creates jobs and new industries
The transition to a climate-neutral economy means that, in the coming years, Austria will also need to expand its infrastructure for energy generation, electrification and greening: solar panels, wind turbines, power lines, storage facilities, heat pumps, electric vehicles, charging points, thermal insulation and new industrial plants.
This costs money. But at the same time, these expenditure represents revenue for the companies that manufacture, install, design or maintain these products. As such, these investments also boost the economy.
Global investment figures illustrate just how large this market has become. According to the International Energy Agency (IEA), around 2.2 trillion US dollars is set to be invested globally in clean energy technologies by 2025. The IEA includes in this figure renewable energies, electricity grids, storage, low-emission fuels, efficiency measures, electrification, and also nuclear power. That is roughly twice as much as the combined investment in oil, gas and coal.
If European companies develop solar technology, storage systems, grid infrastructure, heat pumps, climate-friendly industrial plants or the machinery required for these, they can benefit from this boom. If, on the other hand, these technologies are mainly produced elsewhere, Europe will have to import them.
The energy transition is already a major employer today. According to the International Renewable Energy Agency (IRENA) and the International Labour Organisation (ILO), there were 16.2 million jobs in the renewable energy sector worldwide in 2023. A year earlier, the figure stood at 13.7 million. In the EU, around 1.8 million people were employed in this sector.
In Austria, 231,100 people work in the environmental sector. In 2008, the figure stood at 176,100. These jobs include roles in areas such as renewable energy, energy efficiency, waste management and other environmental technologies. By way of comparison, the entire automotive industry employs 192,000 people – a figure that is now significantly lower than that in the environmental sector.
However, this structural change requires further training and social security. Whilst jobs in fossil fuel sectors may be lost, others are being created and growing at the same time.
4. Those who make the switch early gain an advantage
An OECD study on the automotive industry shows, for example, that manufacturers who invested early in electric, hybrid and fuel-efficient vehicles can gain market share years later. This is particularly the case when fuel prices rise. Conversely, manufacturers with a stronger focus on more climate-damaging technologies come under pressure. Those who invest early build up expertise, experience and production capacity – and can benefit from this when demand for climate-friendly products rises.
This also applies to countries themselves: nations that invest early in emerging green markets can build long-term competitive advantages.
Conversely, it can become increasingly risky for individual companies to rely on particularly CO₂-intensive technologies in the long term. This is because companies often purchase machinery, industrial plant or heating systems for many years or even decades. If, during this period, energy prices, CO₂ prices, regulations or customer demand shift towards climate-friendly products, a system purchased today may become uneconomical sooner than expected. Even banks are increasingly factoring this risk into their lending decisions.
5. The climate crisis costs billions
Probably the most important economic argument in favour of climate action is this: the climate crisis also costs money. Extreme weather is already causing significant economic damage today. According to the European Environment Agency (EEA), extreme weather and climate events caused more than 208 billion euros’ worth of damage between 2021 and 2024.
Floods were particularly costly. According to the EEA, 47 per cent of the damage was attributable to hydrological events such as flooding. Storms accounted for around 27 per cent, whilst heatwaves accounted for almost 18 per cent.
In Austria, events caused by weather and climate change currently result in damage amounting to around 2 billion euros per year. By 2050, this could rise to between 6 and 12 billion euros per year
For businesses, this means that floods can destroy factories, warehouses and machinery. Heatwaves can reduce labour productivity. Droughts can disrupt agriculture, energy supplies and transport. Damaged roads, railways or ports can disrupt supply chains. These impacts were particularly evident during the hot summer of 2026.
Added to this are potential fines: if Austria fails to meet its EU climate targets, it could cost billions. At the end of 2024, the Court of Auditors estimated that, based on the measures in place at the time, Austria would have to purchase emission allowances worth up to 5.8 billion euros by 2030. With additional planned climate protection measures, the estimated amount would be reduced to up to 1.7 billion euros.
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