Germany’s turning point

Acting on climate change is the new economic engine

Scenario 1: €140 billion added to the German economy in 2070

There is evidence that countries that take early and rapid action to establish green and low-emission production capabilities will be rewarded with a more sophisticated and competitive economy in a low-emission world.

Germany will be one of the first countries in Europe to reap the economic benefits of decarbonisation, due to its early adoption of climate policies.

The cost of doing nothing is economically devastating

Scenario 2: €730 billion lost from the German economy in the 50 years to 2070

In this climate-damaged future, there could be 470,000 fewer jobs available in Germany’s economy over the next 50 years, a scenario that could diminish the country’s long-term economic prospects.

_{Source: Deloitte Economics Institute.}

Germany has much to gain from action

Of all the regions of the world, Europe has made some of the most ambitious commitments and plans to tackle climate change, and Germany has been at the frontier of this ambition – recently accelerating the country’s greenhouse gas emissions reduction ambition to ‘net zero’ by 2045. But despite the accelerated ambition, more work needs to be done to get the pace and scale of the transition to net zero right.

Combating climate change and restructuring our economy requires a long-term strategy and a social consensus across generations and nations. We will also need to address and in part mitigate the differences in affectedness across sectors and countries.

_{Source: Deloitte Economics Institute.}

1. Bold Climate Plays – 2021 to 2030: Germany benefits from being an early mover in decoupling its economy from emissions and progressing towards a net zero pathway. 
2. The turning point – 2031 to 2040: From 2038, Germany is better off due to a net zero transition compared to a world of inaction. By the end of this period, it begins to see economic dividends from the transition. 
3. Accelerate to Zero – 2041 to 2050: Germany reaches carbon neutrality before its European neighbours and is reaping the benefits of this transition. Compared to other European countries, it does not experience as severe a transition as others.  
4. Low-emission future – 2050 onwards: Germany’s industries can now fully capitalise on the opportunities of net zero as well as benefitting from the avoided costs of climate change damage.