The impact of Austria’s climate strategy on renewable energy consumption and economic output

Abstract

In the midst of the energy crisis being felt throughout many parts of Europe, this study aims to investigate the full impact of Austria’s 2002 continent-leading climate strategy on national renewable energy consumption. We use country level OECD data spanning 1990–2015 and the synthetic control method. We find that compared to other countries, Austria’s renewable energy consumption rose between 2.64% and 4.43% per annum following the policy. Contrary to some concerns, we do not find that per capita output fell significantly with the greater adoption of renewable energy sources. The study contributes to the literature on environmental governance, policy discourse, and climate. It also provides critical policy insights in the roadmap toward energy security for other countries transitioning toward renewable sources. Results suggest that policies that incentivize renewable energy adoption can meet long term environmental targets without having an adverse impact on economic growth.