The scientists considered a complete hypothetical shutdown of Russian gas imports to Austria as of June 1, 2022. As first step, they analyzed factors on the supply and demand side that have the potential to mitigate the immediate shortfall in gas supply. Second, after taking mitigation factors into account, they quantified gas supply shocks to industrial production. Third, they estimated direct production losses caused by gas shortages. Fourth, using a dynamic input–output model, they quantified total (direct plus indirect) impacts on the economy. Credit: Complexity Science Hub
Austria: Still Russian gas
Austria imported 82% of its gas from Russia in August 2024, while other European countries have long since reduced their imports from Russia. Only 8% of all EU gas imports come from Russia.
Because other European countries are now significantly less dependent on Russian gas supplies, the expected economic consequences will be much smaller than in June 2022, according to the two researchers.
“In our policy brief, we showed that alternative trading partners can play a key role in reducing damage. Now that our neighboring countries are hardly dependent on Russian gas, it is much easier to import non-Russian gas than it would have been two years ago,” says Pichler.
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Mild to severe effects
Based on the hypothetical scenario of a complete halt to Russian gas imports to Europe from June 1, 2022, the study shows that the potential economic consequences can range from relatively mild to extremely severe, depending on countermeasure implementation and success.
The study suggests that securing alternative gas imports, managing storage, and providing incentives to switch to other fuels are the most important short-term policy levers.
“The results seem almost obvious in retrospect. However, in spring 2022 there was great uncertainty about the potential economic consequences and our study quantified the effectiveness and feasibility of each individual measure,” explains Pichler.
In light of the critical situation, what have we learned? “Back then, we reacted to a crisis for which we were unprepared. It is possible for crises like this to occur in other important areas as well. It would be extremely important to conduct similar analyses for other critical sectors and technology areas in order to implement preventative countermeasures systematically,” the researchers conclude.
More information:
Anton Pichler et al, Economic impacts of a drastic gas supply shock and short-term mitigation strategies, Journal of Economic Behavior & Organization (2024). DOI: 10.1016/j.jebo.2024.106750
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Russian gas: What Austria and Europe have learned from their dependence (2024, December 11)
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