Germany must address structural weaknesses to reach ambitious climate targets – OECD

The German government must address structural obstacles to faster and more comprehensively reduce emissions across the country’s economy in order to achieve international climate targets, the Organisation for Economic Cooperation and Development (OECD) found in its latest economic and environmental survey for Germany. Appropriate measures could include a cap in the national emissions trading system for transport and heating fuels in line with climate targets, a phase-out of environmentally harmful subsidies and tax exemptions, as well as more support for research into sustainable technologies, the organisaiton said. Thanks to a resolute response by the government in the energy crisis and a global recovery following the dual shock of the pandemic and of Russia’s war on Ukraine, the country is likely to avoid a recession in the near term, according to the OECD. However, a substantial “infrastructure backlog” — a lack of investments in sustainability and digitalisation and detrimental tax rebates — stand in the way of reaching the national target of climate neutrality by 2045.

“Germany needs to speed up its green energy transition, and the digital transformation of its economy and public administration. At the same time, an ageing population is exacerbating labour shortages and increasing spending pressures,” OECD Secretary-General Mathias Cormann said in Berlin. Moreover, the longstanding problem of lengthy planning and approval procedures continues to slow down investments in climate-friendly projects, the OECD stated. German economy and climate action minister, Robert Habeck, said the survey underscored the need to link economic and environmental policy. “Decarbonising our society is a prerequisite for safeguarding our future livelihood, our prosperity and the prosperity of the future generations,” Habeck argued, adding that the transformation towards a more sustainable economy will also create jobs and improve competitiveness.

Emission reduction efforts in the transport and building sectors should not be focussed on decarbonising specific areas like introducing electric cars, but rather lead to an integrated sustainable mobility strategy, the OECD added. Michael Müller-Görnert spokesperson for transport NGO Verkehrsclub Deutschland (VCD) commented that Germany lacks an “integrated mobility strategy” which would shift the focus away from private cars to public transport and railroads. “We cannot meet climate targets with emissions-free vehicles alone,” he said. While the OECD acknowledged the government’s ambitious climate targets, Müller-Görnert added “that there is no earnest strategy to meet them” in the transport sector. Instead of introducing measures like speed limits, city tolls for cars or higher parking fees, Germany is pushing for faster motorway construction, he argued. “This ultimately not only could lead to missing the climate targets but also to ignoring European regulation,” he warned.