There are a number of campaigns encouraging governments to use the current crisis to reshape the economy, making it fairer and greener at the same time as staving off economic damage. As governments authorise bailouts or support packages for industry, they face a choice. They can prioritise a return to ‘business as usual’, or they can attach conditions to encourage change. They can choose to incentivise certain aspects of industry while letting others atrophy.
In our case studies, we have been highlighting some examples of government action to build back better. Germany is one of those countries that has taken the opportunity of economic stimulus to lower carbon emissions, including promoting electric powered transport.
As part of a broader programme of stimulus spending, support for electric vehicles includes a 6,000 Euro subsidy for those buying new electric vehicles, a doubling of a pre-existing discount. Since the main reason that people hesitate to buy electric is ‘range anxiety’, there is support for charging infrastructure, and a requirement for all existing petrol stations to install electric chargers.
Electric cars are only one part of sustainable transport, and public transport is ultimately much more important. It reduces traffic as well as emissions, and since only the richest buy new cars, government sponsored discounts tend to cut out those on lower incomes, which is regressive. So it’s important that there are balancing elements to make up for that. One of those is a new car tax that will penalise polluting vehicles, while electric cars are exempt. There is also a exchange programme to encourage social services and non-profits to switch to new electric fleets.
Many people are avoiding public transport during the public health crisis, which makes electric cars all the more important. But passengers will return and mass transit will remain important, and Germany’s stimulus package includes support for electrifying public transport too. Companies will be compensated for lost fares during lockdown, and funds are available for electric buses.
Germany isn’t alone in promoting cleaner transport as part of its COVID response. A number of other countries are using a variety of mechanisms to support electric cars, often boosting their own car companies at the same time. While private motoring has other associated problems, these countries could well deliver a notable reduction in transport emissions as a result of the coronavirus crisis. Others, who pursue road building or more general scrappage schemes as part of their stimulus packages, will see fewer benefits or might even make pollution and traffic worse.