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The Impact of Green Technologies on GDP and Employment in the EU

Author

Listed:
  • Francesca Guadagno

    (The Vienna Institute for International Economic Studies, wiiw)

  • Oliver Reiter

    (The Vienna Institute for International Economic Studies, wiiw)

  • Robert Stehrer

    (The Vienna Institute for International Economic Studies, wiiw)

Abstract

Increasing production of green technologies in the EU holds great potential for the European economy. This study uses trade data and input-output tables to estimate the impacts on GDP and employment of reshoring to the EU the production of five major green technologies photovoltaics, wind turbines, batteries, electric motors and electric vehicles. Our findings show that reshoring these five technologies would increase EU GDP by EUR 18.4 billion, or 0.13% of EU GDP, and create 242,728 new jobs. The same shift of imports to EU production would have had roughly half of the impact in 2010. We also find significant spillover effects on other sectors of the economy, particularly for metal products, wholesale and retail, professional, scientific and technical activities, and administrative and support services. To make the most from the transition, we argue that EU green industrial policy should put more emphasis on manufacturing capacities and innovation to meet the targets of the Net Zero Industry Act, remain internationally competitive, and reduce strategic dependencies.

Suggested Citation

  • Francesca Guadagno & Oliver Reiter & Robert Stehrer, 2024. "The Impact of Green Technologies on GDP and Employment in the EU," wiiw Policy Notes 80, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:pnotes:pn:80
    as

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    File URL: https://wiiw.ac.at/the-impact-of-green-technologies-on-gdp-and-employment-in-the-eu-dlp-6918.pdf
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    References listed on IDEAS

    as
    1. Joelle Noailly, 2022. "Directing innovation towards a low-carbon future," WIPO Economic Research Working Papers 72, World Intellectual Property Organization - Economics and Statistics Division.
    2. Oliver Reiter & Robert Stehrer, 2023. "Assessing the importance of risky products in international trade and global value chains," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 50(1), pages 7-33, February.
    3. Oliver Reiter & Robert Stehrer, 2021. "Learning from Tumultuous Times: An Analysis of Vulnerable Sectors in International Trade in the Context of the Corona Health Crisis," wiiw Research Reports 454, The Vienna Institute for International Economic Studies, wiiw.
    4. Maria Carvalho & Antoine Dechezleprêtre & Matthieu Glachant, 2017. "Understanding the dynamics of global value chains for solar photovoltaic technologies," Working Papers hal-01952975, HAL.
    5. repec:wsr:ecbook:2021:i:vii-008 is not listed on IDEAS
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    green transition; photovoltaics; batteries; electric vehicles; GDP; employment;
    All these keywords.

    JEL classification:

    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O25 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Industrial Policy

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