The Austrian Toronto Technology Program

The Economic Dynamics of Greenhouse Gas Reduction Targets

Austrian initiative to implement the Kyoto-Protocol

Published and carried out by the Austrian Council on Climate Change (ACCC)

Intention

Reduction of CO2 emissions

Model

Macroeconomic computer model developed for the Austrian economy.

The concept of the model starts with defining the amount of the 5 factors determining the final economic demand (among others private and public consumption, export). Investment is desegregated into five categories and modelled for each category. In a second step the sum of the final demand is fed into a sector model through which then the effect on demand for certain goods is calculated.

Assumptions:
Details on the assumptions on economic and energy growth and efficiency improvements could not be obtained in time the factor of multiplication for investment is 1.5 (short-term) and 2 (middle-term) no introduction of new technologies, but enhancement of existing technologies

Measures:
The program aims at reaching the Toronto target; this means a 25% reduction of CO2 emissions until 2005 (compared to 1988).

Measures proposed are:

• Cogeneration will be used three times as much as in the baseline scenario
• Renovation of buildings including installing improved insulation will lead to a halving of energy consumption
• Re-design of transportation through implementation of road pricing and the 5 liter car
• Promotion of renewable energies: solar, biomass, wind and photovoltaic energy

These measures request a public prefinancing of S1.44 billion per year. This amount will stimulate S11 billion per year of technology investment and therefore the total investment of S20 billion per year.

Effects on employment:

Net job creation in 2005: 12,200 or 5% of unemployed

Other benefits:

Additional private investment triggered off: over S200 billion through economic activity effect on gross domestic product (GDP): 1.2% or S24.5 billion increase in 2005 effect on national demand (Inlands-nachfrage): S48.2 b. increase in 2005 effect on governmental budgets (in 2005):

Additional income: S8.31 billion
Additional spending: -S0.62 billion (reduced spending)
Net effect: S8.93 billion

 

Contact address:

Prof. Stefan Schleicher, Austrian Council on Climate Change

c/o University of Graz, Universitätstr. 15/F4, 8010 Graz, Austria
Tel +43 316 380 3440
Fax +43 316 380 3440
Email: Stefan.Schleicher@wifo.at