Including Low-Emission Investments in Stimulus Packages

The measures taken by the German govern­ment to deal with the COVID-19 pandemic present enormous challenges for the Ger­man economy. In particular, measures taken to slow down the spread of the infection, including the so-called lockdown, have led to a subs­tantial slump in economic activity. The Federal Government has there­fore flanked these mea­sures with extensive financial measures to cushion these economic conse­quences and protect citizens and companies. Further economic stimulus packages to support and rebuild the economy have been announced or can be expected. These eco­nomic stimulus packages offer the oppor­tunity to facilitate investments in innovative and climate-friendly processes and technologies and to provide a decisive impetus on the path to climate neutrality in 2050. If, on the other hand, funding is provided without taking long-term goals into account, companies may face the risk that the investments that have just been subsidised will have to be written off in just a few years.

Against this backdrop, DIW Berlin, Frankfurt School, PIK Potsdam, and Climate&Company organised an online roundtable to discuss the necessary investments, as well as the obstacles and impediments that hinder them. The event was held as part of the cross-cutting theme Financial Markets, Financial Sector and Climate Finance with participants from the BMF, BMU, BMWi, BaFin, and KfW. Presentations covered research insights by the University of Kassel, DIW Berlin, Frankfurt School, Climate&Company, ifo Institute, and Allianz Research. Based on presentations and discussion, the aim was to inform how stimulus measures can increasingly reflect long-term goals in support of sustainable investment.