Environmental Impact of Subsidy Concepts for Stimulating Car Sales in Germany

Malte Scharf, Ludger Heide, Alexander Grahle, Anne Magdalene Syré and Dietmar Göhlich
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Malte Scharf: Department of Methods for Product Development and Mechatronics, Technical University of Berlin, 10623 Berlin, Germany
Ludger Heide: Department of Methods for Product Development and Mechatronics, Technical University of Berlin, 10623 Berlin, Germany
Alexander Grahle: Department of Methods for Product Development and Mechatronics, Technical University of Berlin, 10623 Berlin, Germany
Anne Magdalene Syré: Department of Methods for Product Development and Mechatronics, Technical University of Berlin, 10623 Berlin, Germany
Dietmar Göhlich: Department of Methods for Product Development and Mechatronics, Technical University of Berlin, 10623 Berlin, Germany

Sustainability, 2020, vol. 12, issue 23, 1-27

Abstract: In 2020, vehicle sales decreased dramatically due to the COVID-19 pandemic. Therefore, several voices have demanded a vehicle subsidy similar to the “environmental subsidy” in Germany in 2009. The ecological efficiency of vehicle subsidies is controversially discussed. This paper establishes a prognosis of the long-term environmental impacts of various car subsidy concepts. The CO 2 emissions of the German car fleet impacted by the purchase subsidies are determined. A balance model of the CO 2 emissions of the whole car life cycle is developed. The implementation of different subsidy scenarios directly affects the forecasted composition of the vehicle population and, therefore, the resulting life-cycle assessment. All scenarios compensate the additional emissions required by the production pull-in within the considered period and, hence, reduce the accumulated CO 2 emissions until 2030. In the time period 2019–2030 and for a total number of 0.72 million subsidized vehicles—compensating the decrease due to the COVID-19 pandemic—savings of between 1.31 and 7.56 million t CO 2 eq. are generated compared to the scenario without a subsidy. The exclusive funding of battery electric vehicles (BEVs) is most effective, with an ecological break-even in 2025.

Keywords: subsidy; automotive industry; prognosis; COVID-19; environmental impact; life-cycle analysis (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:23:p:10037-:d:454557

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