EU Climate Policy Threatens Polish Economy, Consumers Brace for Impact
The EU Climate and Energy Package will impact the Polish economy in the short term. The study focuses on how the economy reacts to the cost of reducing emissions before major changes occur. By using a detailed model, the researchers found that the economy only slightly decreases in GDP when faced with higher production costs. Private consumption also drops due to higher prices and lower income. However, giving money back to households helps soften this effect. Lowering labor costs can boost economic activity, leading to some positive outcomes.