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Defending the IW Study: Realistic Warning Pushes for Fair Transition

Published July 25, 2026 at 7:02 AM UTC

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The IW study's warning that gas heating costs could double is not alarmist but a necessary reality check for German households and policymakers. By quantifying the impact of rising carbon prices, the study provides a clear timeline for the financial consequences of inaction. Supporting the study, energy economists argue that the projected cost increase reflects the true social cost of fossil fuel use, which has long been underpriced. The study rightly points out that low- and middle-income households will be most affected, making the case for a socially balanced transition. Rather than opposing the heating law, the study should be read as a call for better policy design: accelerate the phase-out of fossil fuel subsidies and use carbon pricing revenues to fund income-dependent grants for heat pumps and insulation. Without such a warning, many homeowners might delay decisions, only to face a sudden financial shock. The IW's analysis strengthens the hand of those who advocate for a managed, supported transition away from gas. It makes clear that doing nothing will be far more expensive than investing in clean heating now, especially with state incentives available.