Reforming environmentally harmful subsidies
Bertelsmann Stiftung
2023
Forum Ökologisch-Soziale Marktwirtschaft
How harmful to the climate are state subsidies in the transport and industry sectors? And can reforms protect the climate by saving money and redistributing it more effectively?
These questions are taken from the “Reforming climate-damaging subsidies” study conducted on behalf of the Bertelsmann Stiftung. The Forum Ökologisch-Soziale Marktwirtschaft (internationally known as Green Budget Germany), worked on propositions for reform while Prognos experts calculated their respective impacts.
Subsidies such as the diesel rebate damage the climate. To achieve its climate goals Germany will have to reduce both direct and indirect subsidies that promote greenhouse gas emissions.
The study shows:
The impact estimation and modelling for industry conducted by Prognos shows that reforms can have positive ecological and fiscal impacts, while only impacting cost effects on market shares, production, and employment, to a minor extent.
The modelling in the transport sector points to a substantial dismantling of subsidies. The reform of company car taxation or the diesel tax would lead to increased income tor the state, while at the same time reducing CO2.
It should be noted that our models are unable to illustrate all action/effect mechanisms and in terms of the company car reforms, in particular, we can assume far greater effects. On the one hand, faster electrification would lead to less emissions, equally, it also leads to less additional revenues due to the decreased taxation of electric company cars.
Overall, the distribution effects of the reforms are positively assessed.
Study (PDF, in German) More on the Bertelsmann Stiftung website (in German)
Project team: Andreas Brutsche, Alex Auf der Maur, Dr Andreas Kemmler, Dr Jan Limbers
Last update: 17.11.2023
Senior Expert
For the Council of Experts on Climate Change we conducted an expert appraisal to review the Federal Environment Agency’s greenhouse gas projection data.
What level of investment will be required to ensure a climate-neutral transport sector by 2045? We calculated this on behalf of Agora Verkehrswende, based on three scenarios.
Energy consumption for industry, buildings and transport has remained relatively stable for the last 20 years. A study for the German Industry Initiative for Energy Efficiency (DENEFF) shows how policy can use efficiency measures to counteract this stagnation.
A foundation group commissioned us to use KPIs to visualise the impact of its activities within identified focus SDGs.
For over 15 years now Prognos has been bringing together the actors concerned by the expansion of the electricity grid and facilitating dialogue between them – from the Danish to the Swiss bor-der.
Through the Just Transition Platform (JTP), the EU supports the member states and regions in achieving their climate targets in a fair manner. Prognos provided the JTP with in-depth analyses and knowledge management.
The energy transition is still lagging behind its goals – such are the findings of our 12th Monitoring Report. In two of the four areas, the lights remain on red.
What is the status of the energy transition in Germany? Since 2012, Prognos has been monitoring the energy transition in Bavaria and Germany on behalf of the vbw.
In the coming years new renewable power plants will have to be built – but also flexible gas power plants, which can be used when required. We examined various incentive instruments on behalf of the vbw.
Environmental organisations have tasked Prognos with adapting selected assumptions from the Federal Ministry of Transport and Digital Infrastructure transport forecasts to facilitate climate-friendly transport development.
Prognos is one of the oldest economic research centres in Europe. Founded at the University of Basel, Prognos experts have been conducting research for a wide range of clients from the public and private sectors since 1959 – politically independent, scientifically sound.