Blog #91: What will you do with Your Klima Bonus? 

October 20, 2022
Monika Weber-Fahr
Last week, it finally arrived in my postbox: The notification from the Postoffice that my Klima Bonus had been deposited and that it was ready for pick-up. So the next day, I walked over, armed with my passport and the notification. Much to my surprise, the process turned out to be as easy-peasy as picking up any parcel or delivery: The young man behind the counter checked my ID, then proceeded to look for and find a sealed envelope that had my name on it. He took five Klima Bonus certificates out of the envelope, each worth Euro 10. I got to choose whether I wanted the certificates or rather the cash, and that was all that was to it. I walked home with five brand-new 100 Euro bills in my pocket.


Picture: My Klima Bonus certificates arrived last week - so how do I deploy them best? 

These five bills made me one of those 600,000 plus grown-ups who have had their primary residence in Austria for more than six months (183 days) by July 1 but whose account number the government did not have. The other 4-5 Million eligible grown-ups should have received the bonus as a transfer into their accounts already in September. Over the last few weeks, however, it turned out that not everyone actually received the money, that the help-line at the Ministry of Environment did not work, that some folks had trouble turning their certificates into cash, and so on. A lot of tempests in the teapot of a huge subsidy that has given me pause: Why is the government sending this much money to us? Originally, the purpose of the bonus had been to somewhat compensate us for the expected hike in living cost that that was to follow the envisioned introduction - on October 1 - of a carbon tax. The idea a year ago, when all this got designed, was: A lot of things will get a bit more expensive - heating, driving a car, and so on - so let’s give people some time to adjust. And in order to make adjusting easier, let’s give them the Klima Bonus. But then the Russian war in the Ukraine happened, inflation happened, and energy prices soared all on their own - and not just because of the carbon tax. As a result, the originally planned Euro 250 per person became Euro 500.
But I kept wondering: Why would this Bonus make sense?  Why do all grown-ups in Austria get the same amount - irrespective of how badly the increases in energy prices are hitting them? Caritas Oesterreich has already figured this out, appealing to the more wealthy among us to donate their Klima Bonus and help poorer families to afford the dramatically risen cost of heating this winter. But there is something else that we should also think about: Should we not use the Klima Bonus - or any other resource we have - and invest in energy efficiency measures, in equipment and choices that would reduce our energy consumption in the long term?
Jo Stiglitz is one of the world’s most famous economists, Nobel-prize decorated and always good for insightful observations, in particular on topics regarding globalization, inequality, income distribution, and the climate crisis. A few weeks ago, the near-octogenarian was here in Vienna, at the Vienna Humannities Festival, to speak about An Uncertain Future: The World Economy, Globalization, and Resentment. I had not noticed that a recording of the life stream of his talk had been available on the IWM website until last week when it was featured at the Falter podcast - there under the title War, War Economics, and the Limits of Markets.  It’s a fascinating lecture, touching upon many things - and it also raises the question how we should react to rising energy prices. Stiglitz argues strongly that we all will adjust behaviors only - and invest in measures to reduce our use of energy - if we can reasonably assume that high prices are here to stay. In fact, he also points out - very correctly so - that firms who did not anticipate rising energy cost are being rewarded right now, receiving subsidies to buffer off their high energy costs.
No worries, this blog is not becoming a lecture in economics. But receiving the Klima Bonus should make us think about the incentives it implies, the message it is trying to send. This money is not just there to help us continue living as we have always lived - allowing us to ignore the much higher prices for heating, petrol, and other household items. In fact, many people have already started saving energy - shortening their showers, heating fewer rooms in their flats, keeping the heating down. In fact, turtlenecks seem to have become quite a political statement to this end, well beyond the fashion implications. But we need to look further: We really should see to it that we invest - not just the Bonus but as much as we can possibly afford - into whatever it will take to reduce our CO2-infused energy use in the longer term. We can have heat-insulating windows installed, invest in better measurement and in controlling our gas consumption, or we can buy an electric bicycle to begin replacing our car (if we have one), or, or, or. The list of such actions would be long, I'd presume. Even though, it’s true: We must look out for those with lesser means - that the rising prices do not make lives unlivable for them. In the meantime, let's see what we can do to leverage the Klima Bonus as an opportunity for all of us to actually invest in changing (our own!) behaviors ourselves.
So: Have you received yours?  And what are you going to use it for? Let’s get creative and begin reducing our carbon footprint! Systematically and for the long-term
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