Agora Study: Traffic Transition as Added Value - Further Hesitation Will Be Much More Expensive

The longer politics delay measures for climate-neutral transportation, the more expensive the transition to sustainable transport will eventually become, according to a study. "Political hesitation has a price," states the analysis by Agora Verkehrswende, a non-profit organization for scientific policy advice.

"The price is either measured in money or in greenhouse gases, with all the associated risks."

With timely and ambitious climate policies for the transportation sector, the federal government could even save money compared to maintaining the current status quo in transport policy.

"If the federal government acted according to economic logic, it would need to quickly pull all levers in climate protection for transportation. The result of our study is clear. Ultimately, it is not only about economic prosperity but also about the constitutionally and internationally agreed-upon protection of natural life foundations. Initially, higher investments in the future are needed, but in total, not more money. Above all, more political will is needed," explains Wiebke Zimmer, Deputy Director of Agora Verkehrswende.

Current Measures Miss Targets

In the study, the organization examined three different scenarios with varying levels of climate protection measures in the transport sector. The current transport policy, including planned but not yet decided measures, served as the reference scenario.

"In this reference scenario, transportation greenhouse gas emissions will decrease to 111 million tons by 2030 and roughly 15 million tons by 2045," write the authors. Thus, both the climate target for the transport sector for 2030 and the zero emissions target for 2045 will be missed. 

Two more advanced scenarios are based on the assumption that more ambitious climate protection programs will be launched from 2025 ("Wende 2025" scenario) or from 2030 ("Wende 2030"). In these two variants, climate neutrality in transport would be achieved by 2045. However, the "Wende 2030" scenario would be associated with significantly higher costs - even compared to the reference scenario where everything remains as it is currently. After all, more efforts would need to be undertaken in a shorter time to still achieve climate neutrality.

Alternative scenarios assume less car traffic

All three scenarios assume the same amount of mobility. However, this is distributed differently across individual modes of transport depending on the variant. Public transportation - bus, train, bicycle, and pedestrian traffic - plays a significantly larger role in the 2025 and 2030 scenarios in the long term than in the reference scenario. In the reference scenario, the importance of car traffic even increases until 2045. Here, the focus is not on reducing car traffic, but on replacing combustion engines with electric drives. The proportion of electric vehicles is significantly higher in the "Turnaround 2025" scenario than in the reference scenario, and highest in the "Turnaround 2030" variant. Both paths, however, assume a significant reduction in motorized individual transport.

If the federal government continues as it has so far, it would have to spend around 9.7 trillion euros for the transportation transition by 2045 - indirect costs for climate damage due to continued CO2 emissions included. The climate targets in the transport sector would still not be met despite this enormous sum. The government would fare slightly better if it takes measures by 2025 at the latest, which would still allow the zero-emission target in transport to be achieved within the next 20 years. Due to the lower climate damage, the government would save around 60 billion euros in this scenario.

Late Redirection Becomes Expensive

Redirecting will become significantly more expensive from 2030. Although the climate target could still be achieved then, it would require greater and, above all, more expensive efforts. The federal government would need to raise more than half a trillion euros more compared to a situation where nothing changes in the planning.

"If we act quickly and decisively, the transportation sector can become climate-neutral by 2045," said Wiebke Zimmer, deputy director of Agora Verkehrswende.

This can be achieved without additional costs over the period until 2045. Initially, it requires higher investments, but in total, not more money. Above all, it requires more political will, emphasized Zimmer. 

"Decisive climate protection pays off in the long term, but it needs a solid financing concept," says Carl-Friedrich Elmer, project manager for transportation economics at Agora Verkehrswende. "The federal government plays a crucial role in making the higher initial investments possible. It must find a solution for how the public sector can invest in climate protection quickly, reliably in the long term, and to the required extent. Additionally, it is up to the federal government to create favorable conditions and suitable incentives for private climate protection investments. A first step would be a CO₂-output-oriented reform of taxes, levies, and subsidies around cars – from vehicle and company car taxation to CO₂ pricing with climate money and user-specific car tolls."

Electrification is central: all scenarios with the same transport performance:

All three scenarios enable the same transport performance in passenger and freight traffic and rely on the electrification of drives. Furthermore, the target scenarios also achieve a significant shift in traffic. While in the reference scenario, the share of motorized individual traffic in passenger transport remains very high at almost 80 percent, this share drops to below 60 percent in the target scenarios by 2045. In return, the share of bus and rail rises to almost a third. Compared to the reference scenario, rail performance is almost double, and bus performance is even three times higher. Therefore, in the target scenarios, personnel costs in public transport are also significantly higher. Digital solutions such as autonomous buses and trains were not considered in the study but could potentially solve personnel shortages and thus save additional costs.