Climate economist and Scientist of the Year 2024, Univ. Prof. Dr. Mag. Sigrid Stagl, explains why it is more expensive to do nothing and how transformation can be achieved in a cost-effective way.
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„Above all, we lack the images that paint a new future,“ says climate economist and Austrian Scientist of the Year 2024, Univ. Prof. Dr. Sigrid Stagl, in an interview at the Impact Lech Symposium 2025. On the one hand, we are pursuing an ostrich-like policy, with many trying to close their eyes to the consequences of climate change. On the other hand, however, there is also a lack of attractive images in people’s minds that paint a desirable version of the future. Currently, the discussion is increasingly focusing on the investment costs of climate protection. But not investing is much more expensive, the scientist demonstrates.
Interview by Julia Weinzettl
Why do so many companies cling to short-term investment costs, even though doing nothing to protect the climate is significantly more expensive in the long run?
Univ. Prof. Dr. Sigrid Stagl: We always talk about the costs of the climate transition, but forget the costs of inaction or the consequences of climate change. This means that if we have more extreme weather events, for example, there will be even more frequent floods. Infrastructure, businesses, and homes will be destroyed, and they will have to be rebuilt. Farmers will have to change their crop rotation, fruit growers will have to uproot their fruit trees or plant new ones, and so on. We can do that. We can adapt, but the more often we have to do that, the more often we have unproductive phases, and that costs money. In today’s discussion, we’re talking about the costs of transition. But we’re not talking about the costs we’ll face if we don’t transition. That’s a category error.
If this is so clear, why is no action being taken?
Univ. Prof. Dr. Sigrid Stagl: Because there are winners and losers. Because those who currently produce very energy-intensively, i.e., those who use a lot of fossil fuels, are already severely affected by transition measures such as CO₂ pricing. That is also the goal of the measures. They send a signal: Please don’t continue producing as before, but rather make some changes. This requires economic incentives. Negatively affected sectors are intensifying their lobbying of decision-makers and wish that this transition be delayed because it incurs conversion costs, but it won’t be cheaper. On the contrary, delaying means short-term savings, while further down the timeline, even higher investment costs are already waiting. In an ideal world, the global regulatory environment would be changed at the same time, for example, for the steel and aluminum industries, for glass and cement production, and for large chemical companies in plastics or fertilizer production. But we don’t have a world government and probably don’t want one. So we have to coordinate our actions democratically. Therefore, we need decision-makers who create and utilize opportunities.
Why is it so difficult to develop clear images of a climate-neutral future?
Univ. Prof. Dr. Sigrid Stagl : If we close our eyes and ask: What does our vision of the future look like? We realize: we have no images at all. That’s a real problem. Because the lack of a vision focuses solely on the costs instead of the prospect of a desirable future. But we regularly experience how powerful these images can be in workshops with stakeholders and citizens. When we invite people to work in groups to consider how we will move around, live, or eat in a climate-neutral society, exciting ideas emerge. It quickly becomes apparent how creative and solution-oriented people are once they are given the space and resources to actively participate.
What is the decisive success factor here, and what role does science play?
Univ. Prof. Dr. Sigrid Stagl : The key is that the participants are in the driver’s seat. They ask the questions, and we support them with appropriate scientific methods, provide expertise, and structure the process, but without dominating. It’s not about lectures or ready-made answers, but about genuine participatory collaboration. In a democracy, it is essential that the future is not „prescribed“ by experts, but shaped together. We help link the visions with economic models and, with the help of algorithms, evaluate which variant performs best according to the jointly defined sustainability criteria.
What happens once the desired future has been defined?
Univ. Prof. Dr. Sigrid Stagl : Then the real work begins: We consider together how we can get there. What steps are needed today, next week, next year, and by 2040? This makes the future tangible. People see: This isn’t a utopia, but a realistic goal, and they can help implement it themselves. This clarity and participation are crucial if the transformation is to succeed.
How do you assess the role of the circular economy in the Austrian economy in the context of sustainability?
Univ. Prof. Dr. Sigrid Stagl : In Austria, the export economy is enormously important; around 80% of our production is exported. Even if we were to shut down emissions-intensive production methods in individual sectors, 75 to 80% would still remain. This shows how strong the incentive is to think in terms of a circular economy. It requires active action; it won’t happen automatically. The EU Commission is already working intensively on this. In my view, the circular economy is the backbone of a sustainable production method. Without it, we will not succeed in climate protection, just as we will not be able to protect biodiversity or respect other planetary boundaries.
What makes the circular economy comparatively “easier” to implement than other sustainability strategies?
Univ. Prof. Dr. Sigrid Stagl : As difficult as it may sound, the circular economy is still the „easiest“ lever compared to other challenges. This is because there is real cost-saving potential here. When it comes to climate protection, however, investments in green technologies often involve additional costs. Only when we have completely switched to renewable energies and the grid infrastructure has been expanded accordingly will the situation ease. But we already have the technologies, and if we manage to maintain the employment effects in Austria, this will at least create an economic case, even if not always a classic business case.
What do you consider the greatest challenges in biodiversity conservation?
Univ. Prof. Dr. Sigrid Stagl : When it comes to biodiversity, we face even greater challenges. This involves not just technological changes, but often entirely new production methods. It’s not enough to simply optimize existing processes; we must fundamentally rethink how we do business and how we satisfy our needs. This requires new approaches and a radical rethinking of the economic system.
You have created a comprehensive toolbox that provides considerations and tools to structure transformation. How do the individual elements fit together?
Univ. Prof. Dr. Sigrid Stagl : The sustainable transformation of our economy requires a broad set of measures; I call it an “economic toolbox.” First and foremost is the promotion of green technologies , i.e. innovations that help conserve resources and reduce emissions. But technological solutions alone are not enough. Therefore, point 2 is green preferences . Changes in consumption and production decisions by individuals and companies are necessary to make sustainable behavior the norm. A key lever in the toolbox is the correction of relative prices : if environmentally harmful behavior remains too cheap, switching to sustainable alternatives is not worthwhile. In addition, clear structures are needed . These include a legal framework such as standards, labels and targeted bans, as well as investments in infrastructure and the development of social structures that enable change. At the same time, coordination across the entire government is crucial. Climate protection cannot be left to the environment ministry alone, but must be thought of and implemented across departments. For change to be socially supported, people need freedom and security , as well as genuine participation in shaping the transformation . Those who embrace change must also be able to contribute. Last but not least, it is important to focus on people’s actual needs : Instead of viewing consumption and growth as ends in themselves, we should ask what people truly need for a good life and how we can make this ecologically sustainable.
A major adjustment is the “correction of relative prices,” a term that sounds rather technical to many.
Univ. Prof. Dr. Sigrid Stagl : Yes, that sounds abstract at first glance, but it’s fundamental: Production decisions in companies depend heavily on how expensive certain factors are. If labor is very expensive, attempts are made to replace it with machines, and then we develop labor-saving technologies, for example. I’m always amazed at how obvious this is: For example, in countries with very low wages, people often stand at airports and direct passengers with the words „This way.“ In Austria, where labor is expensive, a sign would be put up for this purpose. This shows how strongly price determines how we use resources and labor.
In terms of sustainability, this means: We should make resources more expensive to encourage their economical use while simultaneously ensuring that labor is not overburdened. Therefore, the „correction of relative prices“ is a key economic control instrument used for ecological transformation.
Another major role is played by public participation in this transformation. Why is that so important?
Univ. Prof. Dr. Sigrid Stagl : Point 6 of the toolbox emphasizes freedom, security, and participation. If we want people to go along with it and support political decisions, they must understand why change is necessary and be able to help shape it themselves. Transformation must not be perceived as a threat, but as an opportunity. That’s why it’s so important that we develop clear visions of the future, focus on needs, and meet people where they are. Only then can this comprehensive change succeed—economically, ecologically, and socially.
What jobs will we need in the future that don’t yet have a name?
Univ. Prof. Dr. Sigrid Stagl : We will need people who can think systemically and, at the same time, have the ability to bring together different perspectives. This means process competence, facilitation skills, and the art of creating sustainable compromises in complex situations. Such roles already exist in some cases, for example in the form of transformation consultants, but in the future, this skill will be essential in many organizations. We often remain trapped in departmental or divisional logic. Without someone who consciously creates space for shared systemic thinking, we miss out on a lot of potential for improvement. These new roles can help develop sustainable solutions, become more efficient, and actively address societal challenges.
About:
Sigrid Stagl has been conducting research in the field of ecological economics and sustainability for over 25 years, primarily in the areas of energy/climate and agriculture/food. At the age of 29, she received the world’s first PhD in Ecological Economics. In 2014, she founded the Institute for Ecological Economics at her alma mater, WU Vienna. Since 2019, she has also headed the WU Competence Center for Sustainability Transformation and Responsibility (STaR). In 2024, she was named Austrian Scientist of the Year by the Club of Education and Science Journalists.
This interview was conducted at Dr. Markus Hengstschläger’s Impact Lech Symposium.
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