Climate Action Scenarios

A variety of policies can reduce greenhouse gas emissions in the transport sector. Identifying the best ones is important for any sustainable transport strategy.

The German government’s 2050 Climate Action Plan aims for a 40 to 42% reduction of greenhouse gas emissions in the transport sector by 2030. This is an enormously ambitious goal, especially as the sector’s emissions have remained persistently high during the past quarter century. If these emissions are to decrease, a sea of change in transport policy is needed.

There are various strategies for achieving this goal, but they all have two aspects in common: they are complex, and they necessitate long-term planning. Infrastructure investments and automobile standards, to name just two examples, have far-reaching consequences that unfold over many years. The option of following multiple technology paths simultaneously is expensive, and some are mutually incompatible. Moreover, reversing course after deciding on one strategy is very costly.

Precise, quantitative models are needed to minimise sources of conflict and friction. By drawing on robust data, these models can provide an accurate picture of the current transport system, allowing us to consider various scenarios for its future development. Clearly, rigorous models for forecasting climate impacts must inform the development of sustainable transport strategies.

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Core results

  1. 1

    Germany can achieve climate neutrality by 2050 in three steps while adhering to existing investment cycles.

    The first step consists of a 65% reduction in emissions by 2030. The second step is the complete transition to climate-neutral technologies, for a total emissions reduction of 95%. The third step is the offsetting of residual emissions through carbon capture and storage.

  2. 2

    The path to climate neutrality involves a comprehensive investment programme comparable in scope to the German economic miracle of the 1950s and 60s.

    The core elements of the programme are the creation of a renewable-based energy sector, mass electrification, a smart and efficient modernization of buildings and the development of a hydrogen economy for the industrial sector. Besides achieving climate neutrality, the programme will also improve people’s quality of life by reducing noise and air pollution.

  3. 3

    An enhanced German reduction target of 65% for 2030, in line with the requirements of the European Green Deal, will require significantly accelerating the green transition in the energy, transport and heating sectors.

    This includes the complete phase-out of coal by 2030, a 70% share of renewables in electricity generation, 14 million electric cars on the road, 6 million heat pumps, an increase in the green retrofit rate of at least 50% and the use of some 60 TWh of clean hydrogen.

  4. 4

    The next legislative period will determine how Germany goes about achieving climate neutrality by 2050 and a 65% reduction in GHG emissions by 2030.

    Government action after the 2021 federal election will be pivotal for future climate policy. Intelligent policy instruments will be needed to modernise Germany’s economy and make it sustainable and resilient. They will also be needed to ensure that the structural changes are as fair and inclusive as possible.

  1. 1

    Technology openness is a prerequisite for a successful and cost-efficient achievement of a sustainable transport sector.

    This means switching to new drive trains and fuels in an undistorted competitive field factoring in all economic costs and benefits of the various technologies.

  2. 2

    Technology openness does not mean technology neutrality.

    Technology-neutral regulations do not discriminate against available technologies. They generate technology openness only when technologies compete against each other under undistorted conditions. However, in practice technology-specific regulations are needed as well to overcome path dependencies in the transport sector and to guarantee technology openness.

  3. 3

    Technologies that harm the climate must be curbed to make space for new climate ­friendly ones.

    Path dependencies and external costs bias technology competition towards combustion engines and fossil fuels. A key approach for correcting these distortions and supporting the market exit (exnovation) of fossil fuels is an effective carbon pricing. Other supplementary instruments are a carbon-based vehicle tax and strict fleet-wide emission limits for new cars.

  4. 4

    Technology-specific policies are needed to promote infrastructure for new drive systems.

    To find acceptance, drive systems require a sufficiently tight-knit and user-friendly energy supply infrastructure network. But the private sector can profitably build infrastructure only when the technology is widely used. Accordingly, the state should temporarily promote the expansion of infrastructure and create a regulatory framework that enables the simple usage of this infrastructure.

  5. 5

    Support new technologies’ competitiveness.

    In order to overcome remaining barriers, targeted and temporarily limited support programmes can facilitate the market entry and ramp-up of innovative technologies. The programmes should consider the state of development of technologies and their projected contribution to decarbonisation. More­over, it seems desirable that the necessary financial means are raised in the transport sector itself, e. g., by the means of a bonus-malus system.

  6. 6

    Generate investment security by a long-term political commitment to sustainable transport and ambitious policy measures.

    Effective political commitment requires setting and ­achieving explicit sector targets. Moreover, the state should signal the inevitability of a transition towards a sustainable transport system by making targeted public investments and enacting a broad instrument mix for the reliable achievement of the transport sector emission target. Furthermore, it must seek to build the broadest political consensus possible.

  1. 1

    To do its part in meeting the Paris Agreement targets, Germany must rapidly reduce its greenhouse gas emissions across all sectors.

    In its Special Report on Global Warming of 1.5°C, the IPCC identified mitigation pathways consistent with the Paris Agreement. From these, national and sectoral carbon budgets and emissions pathways can be derived that minimise overall global mitigation costs. For a least-cost pathway for limiting global warming to 1.5°C, Germany has to reduce its total domestic greenhouse gas emissions by 73 per cent by 2030 and by 98 per cent by 2050 relative to 1990 levels. The least-cost pathway for limiting global warming to 2°C would require Germany to cut its emissions by 68 per cent by 2030 and by 90 per cent by 2050.

  2. 2

    Germany and the EU will have to raise their medium-term reduction targets if they are to be compatible with the Paris Agreement.

    Germany currently aims to reduce its domestic greenhouse gas emissions by 55 per cent by 2030. This is now not enough: Germany needs to set its sights on a more ambitious target. Moreover, it must urge the EU to significantly increase its current 2030 reduction target of 40 per cent. The Paris Agreement and Germany’s Climate Action Plan 2050 require both to present these new, more ambitious plans in 2020.

  3. 3

    A massive escalation of mitigation efforts is needed in the transport sector. Currently, Germany’s Climate Action Plan calls for the reduction of transport sector emissions by 40–42 per cent by 2030.

    This goal is inconsistent with the Paris Agreement targets. For Germany to be on a least-cost pathway to keeping global warming below 1.5°C, its transport sector emissions need to fall by 53 per cent by 2030 relative to 1990 levels. Even limiting global warming to 2°C would require Germany to reduce its transport emissions by 44 percent by 2030. With the current policy trend, transport sector emissions in 2030 will be more than double the level permissible under the least-cost Paris Agreement 1.5°C pathway. If current trends continue beyond 2030, the German transport sector will have released, cumulatively, 5.4 billion tonnes of CO2 between 2016 and 2050. This figure is more than twice the transport sector carbon budget of 2.6 billion tonnes consistent with staying on the 1.5°C pathway and still well beyond the 2°C pathway budget of 3 billion tonnes.

  4. 4

    For the sake of climate equity, Germany’s overall mitigation contribution needs to be higher than the level required by a least-cost emissions reduction pathway.

    In order to contribute its fair share to meeting the 1.5°C target, Germany would have to reduce its emissions – according to a central estimate – by 87 per cent by 2030 relative to 1990 levels. This exceeds its least-cost domestic reduction target by around 14 percentage points. Germany could close this gap by, for example, increasing its funding for international mitigation efforts.

  5. 5

    Fast reductions of transport sector emissions and its full decarbonisation by 2050 are ­possible.

    Key elements in achieving these goals are a strongly accelerated electrification of passenger and freight transport linked to an intensified expansion of renewable electricity generation, a switch to public transport and other more sustainable forms of travel (such as walking or cycling), an increase in rail freight, and an overall more efficient organisation of the transport sector overall. To this end, alongside infrastructural and regulatory measures, pricing instruments – effective carbon pricing in particular – are of central importance.

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