On July 1, Agora Verkehrswende officially went into business. A sister organization of Agora Energiewende, a think tank for Germany’s energy transition, Verkehrswende will focus (as the German name indicates) on the transport transition. If the organization truly pursues environmental policy, it will fill a gap. If it mainly concerns itself with industrial policy, it will be redundant. Craig Morris explores the possibilities.
If the name (Verkehrswende, pronounced “fair-CARES-vend-uh”) and new German-only website are any indication, the new think tank is not worried about reaching the non-German-speaking world for now. Judging from its main focal points, the think tank runs the risk of concentrating on the easy things (electric vehicles and renewable fuels), not on the hard things (bike paths and walkable cities). The former are easy, because there is already a business case and political push. The latter will be harder.
Increasingly, countries around the world – but especially in Europe – are looking into prohibiting sales of non-electric vehicles by around 2030. In addition, there are now reports that the EU could begin fining European cities hundreds of thousands of euros a day (in German) if they do not reduce NOx levels. German cities may have to ban diesels.
Once consumers begin to see diesel cars (including the ones they already own) as an inconvenience, sales of diesel vehicles will plummet. What will people do instead? Even with the current 4,000 euro bonus that the German government offers, electric cars are nowhere close to being an affordable option, as the public will quickly realize when they do the math. To make matters worse, those who own diesels will suddenly find that their used vehicles are practically worthless when bans kick in.
A think tank could do a lot of good here. It could propose further policy support (like trade-in bonuses for diesel owners buying electric vehicles), encourage the development and use of car fleets instead of ownership, and promote apps that connect different mobility modes (trains, rental cars, trams, rental bicycles, etc). That’s a lot of low-hanging fruit – so low, in fact, that all of this is already being talked about and done. Arguably, there is no gap for the new think tank to fill here, though it could help.
What about the hard stuff? Verkehrswende seems to have a technical approach. Sector coupling (such as using electric vehicles to support the grid) is highlighted, but I could not find any explicit mention of bike paths or walkable cities. To address those issues, we need to move beyond engineering and into urban planning—but there is no clear business case to do so.
The business case for German automakers to transition from diesel to electric cars is pretty obvious: there is no future for diesel. But municipal governments are not going to go out of business if they don’t build bike paths or make cities more walkable. On the contrary, German municipalities are broke. They cannot even make the upfront investments, nor is there any clear way of monetizing bike paths or walkable urban environments – where’s the payback for City Hall?
Berlin is a case in point; bike paths in the German capital are awful. Its citizens are fed up and have launched a campaign for better cycling infrastructure. The city’s budget includes funding for bike paths, but the money is not even spent completely because the city lacks staff (in German). Last year, Berlin spent 3.40 euros per citizen on bike paths although it had set aside five euros per person (in German).
Berlin’s debt amounts to 17,500 euros per citizen, making it unlikely that the government will remedy this problem soon. The campaigners are calling for 320 million euros to be spent over the next eight years; city officials counter that the actual price tag for the campaign’s demand is closer to 2.1 billion euros (in German). Whatever the cost, the money will not lead to any significant tax revenue, unlike incentives for electric vehicles. A think tank would be helpful here in designing a business case or at least identifying ways of spreading out the cost burden.
Likewise, walkable environments are a matter for urban planners. The enemy is sprawl, so towns have to work with surrounding villages. There may be a business case from property tax revenue, but only if a town and its surrounding hamlets work together.
Will Verkehrswende address these overlooked hard issues or jump on the bandwagon of sector coupling and electric mobility? The incentive to do the latter will be tremendous. When the think tank’s impact is reviewed in a few years, its input into the automotive sector’s transition to EVs, which will happen anyway, will look impressive indeed. Success in combating sprawl and promoting cycling and walking will be slow to come and harder to quantify.
Most of all, electric vehicles are still cars, and we need to make do with fewer of them. Keeping German carmakers afloat by transitioning them to EVs is industrial policy, not environmental policy – saving the planet requires much more cycling and walking. Here’s hoping the think tank and its funders realize the opportunity they have in helping to find solutions for the hard stuff!