Promoting electric vehicles in Germany via subsidies – An efficient strategy?

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Electric mobility is becoming increasingly attractive: in big cities and metropolitan areas the quality of life is rising as more electric cars generate less noise, as well as lower emissions and particulates. Fossil fuels never-theless still account for an extremely large share of the transportation system, as over 95% of all vehicles use conventional fuels. The transportation sector produces over 20% of all global CO2 emissions. In view of more ambitious climate goals and emissions reduction targets of up to 80% in the decades ahead – as set out in the most recent climate policy agreement reached in Paris – a sustainable mobility strategy needs to substantial-ly increase the share of alternative and climate-friendly transportation technology and fuels. Electric mobility is indeed one component of a sustainable mobility strategy. With an increased share of electric vehicles and renew-able energy for electricity production, emission reduc-tion goals could be met. Not only electric cars, but also rail traffic and transport (including commuter railway systems) are now electric. Individual electric mobility could be a good complement to the existing rail trans-port system. Electric vehicles do not produce particu-lates, noise or other emissions and therefore meet sever-al criteria for sustainable and climate-friendly mobility. Batteries of electric vehicles could be a storage option for volatile renewable energy. Decentralized electricity distribution grids could be unburdened by a higher share of storage batteries. Moreover, positive environmental effects could be achieved if electric vehicles were not filled with climate-unfriendly coal electricity, but with renewable electricity. Electric vehicles always need to be combined with a strictly sustainable transportation strategy (Dijk, Kemp and Orsato 2012).
Original languageEnglish
JournalCESifo DICE Report
Volume14
Issue number4
Pages (from-to)65-70
Number of pages6
ISSN1612-0663
Publication statusPublished - 01.12.2016
Externally publishedYes