Back to the future of the German automotive industry

_ Yuri Kofner, economist, MIWI Institute. Munich – Suhl, November 4, 2021.

Executive summary

• The automotive industry is of enormous importance for the German economy: It generates almost 5 percent of GDP, directly and indirectly employs 7 percent of the workforce and is the most innovative sector.
• The business model of the German automotive industry is geared towards internationalization, especially the Asian and Chinese markets, as well as the premium segment. So far, this strategy has helped German car companies cope with the COVID economic crisis better than their European competitors.
• The structural change in the industry towards alternative drive methods and the digitization of mobility, e.g., autonomous driving, are the greatest challenges for the German automotive industry. There are convincing arguments that this transformation is being driven both by market forces, such as developments in the Chinese car market, and by state requirements, such as the EU’s climate policy and that of the German federal government (CO2 pricing and regulatory restrictions).
• There is currently no great success and no future guarantee of success in sight that a hasty and forced switch to e-mobility will make the German automotive industry a global export champion in this segment.
• On the contrary, the unilaterally targeted industrial policy against the internal combustion engine in the transport sector and in favour of e-mobility leads to a massive loss of jobs (up to 215 thousand by 2030), added value (1 to 1.4 percent of GDP) and international competitiveness.
• In addition, Germany’s tightened national solo effort in climate policy will not even help to reduce global CO2 emissions due to the Green Paradox and the carbon leakage effect.
• For this reason the author proposes to replace the current (automotive) industrial policy with a more horizontal approach that focuses on three key elements: 1) technology neutrality with more R&D support for the creation of a circular carbon economy and the use of synthetic hydrocarbon fuels; 2) return to an ordoliberal location policy (lower taxes and electricity costs, cut red tape, more free trade, more investments in (digital) infrastructure, education and research); and, 3) an explicitly pragmatic and multilateral climate policy, either through a global emissions trading system or an international climate fund.

Significance for the German economy

In 2019, the automotive industry was responsible for 4.7 percent (163 billion euros) of the German gross domestic product and for 7 percent of all jobs in Germany: a total of 3.2 million people, 830,000 of them directly employed. [1]

In the “golden 2010s”, after the financial crisis of 2009, the export-oriented auto industry acted as the growth engine of the German economy and is still its most important innovation driver. In 2017, over 50 percent of patents came from legal entities in the automotive industry. [2] In 2020, the automotive sector spent more than 50 billion euros on research and development. [3]

In the entire manufacturing sector, it contributes directly to around 20 percent of gross value added, 12 percent of employment and 44 percent of its own research and development expenditure. On average, an employee in the automotive industry earns 830 euros more than in the rest of the manufacturing sector. Small and medium-sized companies make up four fifths of the corporate structure of the German automotive industry. This forms an important anchor point for the domestic middle class. [4]

According to studies by the ifo Institute, more than 600,000 German industrial jobs, around 130,000 medium-sized jobs and around 13 percent (48 billion euros) of gross value added depend directly and indirectly on internal combustion engine technology. [5]

In Thuringia alone, more than 660 companies were part of the auto and supplier industry in 2019, which with 68,000 employees generated sales of 9.4 billion euros. [6]

Effects of the corona economic crisis

During the Corona measures crisis in 2020, the German automotive industry performed relatively better than its European counterpart in France or Italy: the former fell by 12 percent, the latter by 40 and 60 percent respectively. [7]

The corona crisis and the following supply chain bottlenecks are often cited as the reason for the problems in the German automotive industry. However, this argument is insufficient. In fact, the industry’s sales, production, and business prospects began to decline in mid-2018. [8] The main reasons for this are the politically enforced transformation of the drive systems, as well as the increasing protectionism by the USA and other important markets.

Business model with a focus on China and premium class

The globalization of production and sales is one of the two central pillars of the business strategy of the German automotive industry.

Between 2007 and 2017, the production of passenger cars by German manufacturers in Germany remained relatively constant at 6 to 5 million units per year. At the same time, global foreign production by German cars rose by almost 70 percent in the same period. In 2017, over 2/3 of the cars produced by German automotive groups were manufactured abroad. After 2017, the production figures in Germany began to decline for the first time – to 3 million cars in 2020. [9]

The second pillar is the fact that German car brands dominate 70 to 80 percent of the global premium segment.

This focus on non-European and premium markets is also the main reason why the German auto industry performed relatively better than its French and Italian competitors in 2020.

Asian markets and especially China play the central role in the modern German automobile business model.

From 2018, more cars will be built by German car companies in China than in Germany. From 2005 to 2019, the global passenger car market grew by only 4 percent without China, but 42 percent with China. The EU’s market share only stagnated, while the US even fell slightly.

With 30 to 40 percent of sales, China is already the third largest sales market for German automobile manufacturers after the USA and Great Britain. At the same time, the premium strategy makes it possible to generate enough profit to continue to enable production to be localized within Germany: a German car exported to China has an average value of 50,000 euros, twice as much as to the United Kingdom.

In the medium-term future, the Chinese market will remain the most important cash cow: PwC predicts that the European car market will only grow by 20 percent by 2025 and then stagnate, the US market is expected to grow by 38 percent by 2035, while the Chinese sales market will grow by 2035 almost half will grow. [10]

Structural change: e-mobility and digitization

The very rapid transformation of the German auto industry towards the electrification of the drive system is viewed with suspicion by many liberal-conservative economists. [11]

The turn to e-mobility is being promoted by the large German automotive groups, but above all by the European Commission and the federal government, which use almost every means of industrial policy instruments for this goal – research funds, certificate trading, steering taxes, subsidies, quotas, bans and Propaganda.

The question arises as to whether this hasty and one-sided push towards e-mobility in Germany is the result of an immature, predominantly ideologically-driven climate hype that will, willingly or unintentionally, mean the end of one of the most important German branches of industry, or if it is more likely a calculated, adaptive and forward-looking strategy is to keep this industry competitive along the exogenous trends of its most important and growing markets – Asia and China.

On the one hand, electric cars accounted for 10.5 percent of the passenger car market share in the EU in 2020, while it was only 6.3 percent in the US and even less – 2.1 percent – in China. This indicates that the push towards e-mobility is not a reaction to the Chinese sales market, but is driven by European industrial policy. [12]

In 2020, the share of battery electric vehicles (BEV) in new registrations was 11 percent in Germany, 2 percent in the USA and 6.2 percent in China, which seems to reflect the above idea.

However, if one looks at the total number of approved BEVs, one can see that China could indeed be the most important pull factor for the electric mobility trend. In China, 1.2 million BEVs were newly registered, in the USA and Germany only 0.3 million to 0.1 million BEVs. [13]

In 2017, China introduced a sector-based cap-and-trade program for electric vehicle production. Under this, automakers receive credits for the sale of electric vehicles, which can offset the penalties for their more CO2-intensive models. This industry-centered system could be replaced by a nationwide emissions trading system in 2023. [14]

It is not yet possible to clearly assess whether Germany is well positioned in terms of digitization in the automotive industry in a global comparison.

On the one hand, the German automotive industry employs more experts for activities in the field of digitization, such as engineering, IT and education, than those in other countries. [15]

On the other hand, according to a current overview by the ifo Institute, German car manufacturers could soon lose the market for autonomous driving technologies to US technology giants and chip companies. [16]

In the overall digitization indices, too, Germany mostly only ranks in the lower tier. According to the European Center for Digital Competitiveness, Germany was ranked 6th among the G7 countries and 18th among the G20 countries in 2021. [17]

Effects of government climate action

The federal government plans to reduce CO2 emissions in the transport sector by more than 48 percent by 2030: from 164 million tons of CO2 in 2019 to 84 million tons. The questionability of this goal is shown by the fact that at the same time the Chinese transport sector will officially increase its CO2 emissions by 200 tons, i.e., more than twice as much as Germany has to save. [18], [19]

The latest studies by Prognos AG assume that federal policy will reduce the proportion of vehicles with internal combustion engines in the German fleet from 89 percent in 2020 to 58.4 to 48.5 percent in 2030.

The federal government is trying to enforce this electrification of the transport sector with a mix of instruments, above all CO2 pricing and BEV subsidies.

Through the national CO2 levy (also known as CO2 tax) under the Federal Emissions Trading Act, as well as through participation in the EU certificate trade, Germany had the highest CO2 pricing in the world in 2019 – an average of over 50 euros per ton Total CO2 (487 euros per capita). [20]

According to the federal government’s climate protection plans, the average CO2 price in Germany will be 115 euros per ton or 981 euros per capita in 2030.

In the German transport sector alone, the average CO2 avoidance costs were already 200 euros per tonne of CO2 in 2019.

The introduction of the CO2 tax at the beginning of 2021 has led to a sharp rise in fuel prices: from June 2020 to June 2021 by 30 cents per liter of petrol and 25 cents per liter for diesel. [21]

Germany already had the world’s highest gasoline prices in June 2020. On average, German drivers had to pay 1.7 euros per liter of petrol and 1.6 euros per liter of diesel in October 2021, according to the ADAC. This is the highest value since 2012. [22]

By 2030, the price of fuel at German petrol stations will be between 2 and 2.7 euros. That would mean an additional burden of 1,800 euros per year for a family in the country and reduce overall traffic mobility in the Federal Republic by 7 percent. [23]

Analyses by the IW Cologne show that the tax burden makes up two thirds of the gasoline price and around 60 percent of the diesel price. [24]

Most economists agree that the avoidance costs of ordopolitical measures are much higher than those of a uniform CO2 price signal. [25]

State subsidies for electric cars cost up to 2 billion euros annually [26] and an expected increase in vehicle tax could cost a further 12.7 billion euros annually. [27]

Weimann (2021) estimates the converted avoidance costs of e-car subsidies at just under 1200 euros per ton. [28] And Paltsev et al. (2018) estimated the average avoidance costs due to stricter fleet limits in the EU at over 1000 euros per tonne of CO2. [29]

The ifo Institute estimates that the conversion to e-mobility in the German automotive industry will lead to a net loss of over 170,000 employees (direct and indirect) by 2025 and of 215,000 employees by 2030. [30] The BMWi estimates the loss effect of structural change to be 300 thousand jobs by 2040. [31] Accordingly, in Thuringia alone, at least 18.2 thousand people who are employed in the motor vehicle and supplier industry could lose their jobs by 2030.

Alternative auto industry policy: technological neutrality, location policy and global climate policy

Whether the structural change in the German automotive industry is driven more by market forces, e.g., via the pull factor of the Chinese market, or more by the climate ambitions of the federal government – one thing is certain: German industrial policy in its current form leads to massive job losses and is considerably unnecessary costs for business and economic prosperity.

As shown above, it is also no guarantee of future market leadership. Another example of this: In the last decade (2010-2019), German exports of electrolysers have almost halved from 188 to 96 million euros, while Chinese exports of this “green” technology have increased by 42 percent from 150 to 213 million euros are. [32]

Furthermore, due to the Green Paradox, as described by Sinn (2021), [33] and the carbon leakage effect [34], the German special path to climate policy could most likely not even help the climate.

For this reason, Germany needs to change its industrial policy. It should return to a horizontal ordoliberal approach, [35] geared towards attractiveness of the location, more open to technology and more pragmatic in terms of climate policy.

Technology openness

As mentioned above, the Federal Government is mainly only supporting one new technology on one side – the battery-electric drive. Aside from that, the government also has an agenda to create a hydrogen economy. However, this agenda has received relatively little support.

The government’s industrial policy needs to be much more technology open. According to climate researcher Bjorn Lomborg (2021), the solution to combating climate change lies in supporting R&D and innovation and not in promoting CO2 taxes and ordopolitical bans. [36]

In this regard, the technological approach of creating a carbon cycle economy, i.e. based on synthetic hydrocarbon fuels and CO2 capture technologies (CCS), could be significantly more cost-effective in reducing CO2 emissions, while at the same time maintaining the significant added value and knowledge intensity of internal combustion engine technology in Germany Automotive industry is preserved, and you can continue to use the existing refuelling infrastructure.

According to studies by the Ifo Institute, more than 600,000 German industrial jobs, around 130,000 medium-sized jobs and around 13 percent (48 billion euros) of gross value added depend directly and indirectly on internal combustion engine technology. [37]

Depending on the mix of measures, between 50 and 70 percent of the vehicle fleet will continue to be equipped with internal combustion engines in 2030. [38] Global demand for internal combustion engines is expected to continue to grow by 4.9 percent annually through 2025, especially in emerging markets. [39]

In the transport sector there will still be wide areas in which a purely battery-electric or H2O-based mode of transport will be economically difficult or impossible to implement by 2050. These areas include air traffic, shipping, agricultural and construction machinery, and heavy goods traffic. [40]

According to the first profitability calculations, CO2-neutral synthetic fuel could be produced using the Bavarian TCR process at 75 cents per liter (before taxes). A further cost reduction through the upscaling of the technologies is foreseeable. [41]

Synthetic fuels can also be mixed with gasoline and diesel. Compared to e-mobility, one can already actively reduce CO2 emissions. If you add only 5 percent synthetic fuel to all cars with combustion engines in circulation in Germany, one would reduce CO2 emissions just as much as if 100 percent of the new cars were electric in one year.

According to forecasts by the IW Cologne, the global demand for synthetic fuels could reach a good 20,000 TWh by 2050 – this corresponds to half of today’s global crude oil market. In contrast to e-batteries, Germany still has the chance to become the international world market leader in the manufacture and marketing of conversion systems for the production of synthetic hydrocarbon fuels. Better funding for research and development in this area can create around 30 billion euros in added value and a total of almost 400,000 new jobs in German mechanical and plant engineering. [42]

At the same time, the government should give much more support to the research and development of carbon capture (CCS) and carbon cycle technologies in automobiles and man-made fuel production facilities. These would not help to reduce CO2 emissions more cost-effectively, but also to reduce the existing combustion

Global climate policy

In order to save CO2 emissions efficiently, i.e. cost-effectively, they have to be saved where it is cheapest in relative terms. The average avoidance costs per tonne of CO2 for China are estimated to be only 5 euros (51 euros per capita) in 2020 and 10 euros (95 euros per capita) in 2030, around 10 times lower than in Germany.

According to proposals from leading climate economists, either a global trading system with emission certificates (ETS) or an international climate fund would be suitable. The above meta-study shows that a global ETS would at least halve the economic costs for Germany of the CO2 reduction measures. [44]

The creation of an international climate fund as proposed by van Suntum (2021) would be an effective instrument to encourage carbon-intensive developing and emerging countries to implement a CO2 reduction policy, as the fund would provide them with financial incentives for CO2 reduction. At the same time, the fund would be financed by national contributions from the participating countries. Thus, Germany could reduce the same amount of global CO2 emissions, but at much lower economic costs for their own country. [45]

Horizontal location policy

Even if one sees the advantages of synthetic fuels and the carbon cycle approach over the current unilateral state preference for electromobility, one should not make the mistake of replacing one targeted industrial policy with another. Although mission-based industrial policy is currently in vogue, e.g., through the writings of Mazzucato (2021), [46] a targeted industrial policy never seems to have worked effectively and as hoped. [47]

The right approach to support the international competitiveness of the German automotive industry and to maintain and create new value creation, jobs and innovations domestically is to return to the traditional successful model of the social market economy – a horizontal industrial and location policy.

According to the annual monitoring of the IW Cologne, Germany’s attractiveness as a location has deteriorated significantly since 2013 during the reign of the grand coalition. There are clear competitive disadvantages, especially when it comes to costs. This applies to labor and energy costs as well as the tax burden. With regard to the digital infrastructure and the bureaucratic burdens, companies in Germany have significantly worse framework conditions than in an international comparison. [48]

In order to compensate for this loss of attractiveness of the last decade, the government must return to a horizontal location policy that should include the following measures:

• Reduction of the tax burden;
• Reduction in electricity costs;
• Reducing red tape;
• Less subsidies;
• Providing a better (digital) infrastructure;
• Investing more in education and research;
• Removing barriers to foreign trade.

These measures could significantly relieve the automotive industry, increase the attractiveness of the location and boost economic output.

Reduction of wage costs: According to calculations by the Ifo Institute, smoothing the wage increase in income tax rates for small and medium-sized businesses would free the low-wage earners and lower middle class by a total of 38.4 billion euros (1.2 percent of GDP). The complete abolition of the solidarity surcharge will reduce the tax burden by an additional 0.8 billion euros. [49]

Lowering corporate taxation: The abolition of trade tax and the lowering of the corporate tax rate from 15 to 10 percent would take the pressure off German automotive companies considerably. This will relieve the entire business environment of 71 billion euros (2.2 percent of GDP). [50]

Reduction of electricity costs: The abolition of the CO2 tax and the EEG surcharge as well as the reduction of the electricity tax by 90 percent to the EU minimum would relieve the economy by 46.1 billion euros (1.3 percent of GDP) annually. This measure would reduce the average electricity price for industry by 46 percent from 21 cents per KWh in 2020 to 11.6 cents per KWh. [51]

Reducing bureaucracy, especially for small and medium-sized companies in the supplier industry, would be an important aspect of the new location policy. The proposed measures should include: simplifying and accelerating business start-ups (from 9 to 5 steps and from 8 to 3 working days), abolition of certain notarial obligations for start-ups, standardization of thresholds for SMEs, expansion of small business regulations, reduction of retention periods for SMEs, abolition of the Receipt obligation, introduction of a corona-related bureaucracy moratorium, as well as a complete repatriation of national sovereignty through business regulatory competencies.

The effects of these qualitative de-bureaucratisation measures can be quantified with the help of empirical results of a regression analysis by Adepoju U. (2017). If the deregulation efforts as an improvement in Germany in the World Bank indicators “Starting a business”, “Dealing with construction permits” and “Regulatory quality” were to be improved to the average level of the OECD high-income countries, this would increase domestic GDP by 0.4 percent (13.2 billion euros). [52]

Subsidies cut: Various unnecessary, controversial and market-distorting state aids, such as the aforementioned purchase premiums from the BMWi for e-cars, could save a total of 7 billion euros annually. [53]

State investments in infrastructure: According to estimates by the IW Cologne, Germany will have to invest at least 375 billion euros in infrastructure within the next ten years. [29] Government expenditures for the municipal and nationwide “hard” infrastructure (e.g. hospitals, motorways, rail lines, etc.), for public transport, especially in rural areas, for education, broadband and social housing should therefore be increased. This could be done by setting up a Germany Fund. According to their simulations, the additional annual investments of this fund of 37.5 billion euros would increase German GDP by 0.5 on an annual average by 2025. [54]

Accelerated digitization could include the following measures: an expansion of public services through e-government; a harmonization of digital standards, models and platforms at state, federal and European level; the elimination of strict GDPR requirements; the creation of a Federal Digital Agency and a data trustee for the processing and exchange of big data and the acceleration of broadband connectivity, especially in the area of ​​“fiber-to-premises” and in rural areas.

The possible economic effects of the implementation of these measures can be quantified with regression analyses based on the DESI panel data and on the basis of research results for the Federal Ministry for Digitization and Business Location. Accordingly, if Germany were to achieve the same degree of digitization as Austria in the areas of e-government, integration of digital technology and human capital by 2025, as well as Sweden in the areas of connectivity and internet use, then German GDP would be 1.9 percent higher (61 , 8 billion euros). [55]

State investment in education and research: Total investment in education, research and development should be increased, inter alia, through: higher state investment in the MINT research fields (e.g. in the nuclear sciences); a return to research freedom; an amendment to the Research Allowance Act (FZulG) from 2019; the first-time introduction in Germany of special economic zones with a special focus on the promotion of innovative R&D activities, as well as by facilitating the (re-) immigration of emigrated German and foreign skilled workers.

If this renewed emphasis on research and development is quantified as an increase in total holistic R&D spending from the current 3.1 percent to 4 percent of GDP (as in South Korea), then this would, firstly, be an increase in government R&D spending by 9.7 billion euros and, secondly, the mobilization of private R&D efforts by 21.3 billion euros via the above-mentioned deregulations and incentives. According to the empirical results of the DIW, this additional research funding would increase the German gross domestic product by 0.4 percent or 14.5 billion euros. [56]

Strengthening free trade: The creation of free trade agreements between the EU with the Eurasian Economic Union, the African Union, ASEAN as well as the USA and Mercosur would increase Germany’s gross domestic product by 4.1 percent (133.4 billion euros). [57]

The federal government should oppose the introduction of the planned EU carbon limit adjustment mechanism, which will significantly increase the prices for raw materials such as steel and aluminum, [58] which are important intermediate products for the auto industry, and increase the German gross domestic product between 0.03 and 0.3 percent . [59]

In particular, Germany should revoke its supply chain law and oppose the planned EU due diligence legislation. These represent a significant non-tariff barrier for the German automotive industry. [60] For comparison, according to the IfW Kiel, mechanical and plant engineering will have to lose up to 13 percent of its preliminary product imports as a result of the supply chain law. [61]

Notes

[1] Puls T. (2021). Strukturwandel in der Automobilindustrie – wirkt die Pandemie als Beschleuniger? IW Köln- URL: https://www.ifo.de/publikationen/2021/aufsatz-zeitschrift/strukturwandel-der-automobilindustrie-wirkt-die-pandemie-als

[2] Puls T., Fritsch M. (2020). Eine Branche unter Druck. Die Bedeutung der Autoindustrie für Deutschland. IW Köln. URL: https://www.iwkoeln.de/studien/thomas-puls-manuel-fritsch-die-bedeutung-der-autoindustrie-fuer-deutschland.html

[3] vda (2021). Jahresbericht 2020. URL: https://www.vda.de/dam/vda/publications/2020/VDA5193_JB_2020_DE_WEB/VDA5193_JB_2020_DE_WEB_RZ2.pdf

[4] ifo Institut (2021). Strukturmerkmale Automobilindustrie. URL: https://www.ifo.de/en/industry-atlas/automotive-industry

[5] ifo Institut (2017). Auswirkungen eines Zulassungsverbots für Personenkraftwagen und leichte Nutzfahr-zeuge mit Verbrennungsmotor. URL: https://www.ifo.de/publikationen/2017/monographie-autoren-schaft/auswirkungen-eines-zulassungsverbots-fuer

[6] LEG Thüringen (2021). Branchenprofil Automotive. URL: https://www.invest-in-thuringia.de/de/branchen-technologien/automotive/

[7] Puls T. (2021).

[8] ifo Institut (2021). ifo Konjunkturperspektiven 09/2021. URL: https://www.ifo.de/publikationen/2021/zeitschrift-einzelheft/ifo-konjunkturperspektiven-092021

[9] VDA (2021). Automobilproduktion. URL: https://www.vda.de/de/services/zahlen-und-daten/jahreszahlen/automobilproduktion.html

[10] Strategy& (2021) Digital Auto Report 2020. URL: https://www.strategyand.pwc.com/de/en/insights/2020/digital-auto-report/digital-auto-report-2020-full-version.pdf

[11] Puls T., Fritsch M. (2020). Eine Branche unter Druck. Die Bedeutung der Autoindustrie für Deutschland. IW Köln. URL: https://www.iwkoeln.de/studien/thomas-puls-manuel-fritsch-die-bedeutung-der-autoindustrie-fuer-deutschland.html

[12] Freiberg S. (2020).  Foreign trade policy aspects of promoting e-mobility in Germany. MIWI Institute. URL: https://miwi-institut.de/archives/1292

[13] ifo Institut (2021). Strukturwandel in der Automobilindustrie – wirkt die Pandemie als Beschleuniger? ifo Schnelldienst. URL: https://www.ifo.de/publikationen/2021/aufsatz-zeitschrift/strukturwandel-der-automobilindustrie-wirkt-die-pandemie-als

[14] Sun Y., Goh B. (2021). China’s green car credit system to be replaced as country pursues carbon neutrality. Reuters. URL: https://www.reuters.com/business/autos-transportation/chinas-green-car-credit-system-be-replaced-country-pursues-carbon-neutrality-2021-09-27/

[15] Czernich N., Falck O. (2021). Transformation in der Automobilindustrie – welche Kompetenzen sind gefragt? ifo Institut. URL: https://www.ifo.de/node/64917

[16] Falck O. et al. (2019). Fahrzeugbau – wie verändert sich die Wertschöpfungskette? ifo Institut. URL: https://www.ifo.de/en/publikationen/2019/monograph-authorship/fahrzeugbau-wie-verandert-sich-die-wertschopfungskette

[17] ECDC (2021). Digital Riser Report 2021. URL: https://digital-competitiveness.eu/digitalriser/

[18] Auf der Maur A., Trachsel T. (2021). Zielpfade für den Klimaschutz im Verkehrssektor. Prognos. URL: https://www.prognos.com/de/projekt/zielpfade-fuer-den-klimaschutz-im-verkehrssektor

[19] Berechnungen des Autors anhand von: Jin L. et al. (2021). Opportunities and pathways to decarbonize China’s transportation sector during the fourteenth Five-Year Plan period and beyond. ICCT. URL: https://theicct.org/sites/default/files/publications/decarbonize-china-transport-14th-5-year-plan-oct21.pdf

[20] Böhm J., Peterson S. (2021). Fossil fuel subsidy inventories vs. net carbon prices: A consistent approach for measuring fossil fuel price incentives. IfW Kiel. URL: https://www.ifw-kiel.de/publications/kiel-working-papers/2021/fossil-fuel-subsidy-inventories-vs-net-carbon-prices-a-consistent-approach-for-measuring-fossil-fuel-price-incentives-16282/

[21] Junge Freiheit (2021). Benzinpreis springt nach oben – Strom so teuer wie nirgendwo in Europa. URL: https://jungefreiheit.de/wirtschaft/2021/benzinpreis-strom-strompreis-europa/

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[23] Delhaes D. (2021). 70 Cent mehr pro Liter Benzin – Warum der Spritpreis deutlich steigen wird. Handelsblatt. URL: https://www.handelsblatt.com/politik/deutschland/bundestagswahl-2021/klimaschutz-70-cent-mehr-pro-liter-benzin-warum-der-spritpreis-deutlich-steigen-wird/27565924.html?ticket=ST6848067lBVtab6uft3QTB4GM5mu-cas01.example.org

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[25] Van Suntum U. (2019). Klimaschutz: Das Greta Thunberg Syndrom. URL: https://www.youtube.com/watch?v=ihwB4Xnodio

[26] Laaser CF, Rosenschon A. (2020). Kieler Subventionsbericht 2020: Subventionen auf dem Vormarsch. IfW Kiel.  Die Schätzungen sind ohne das fiskalische Corona-Konjunkturpaket. URL: https://www.ifw-kiel.de/de/publikationen/kieler-beitraege-zur-wirtschaftspolitik/kieler-subventionsbericht-2020-subventionen-auf-dem-vormarsch-0/

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[31] BMWi (2019). Automobile Wertschöpfung 2030/2050. URL: https://www.bmwi.de/Redaktion/DE/Publikationen/Studien/automobile-wertschoepfung-2030-2050.html

[32] Matthes J., Schaefer T. (2021). Exportperformance von Gütern zur Herstellung erneuerbarer Energien enttäuscht. IW Köln. URL: https://www.iwkoeln.de/studien/juergen-matthes-thilo-schaefer-exportperformance-von-guetern-zur-herstellung-erneuerbarer-energien-enttaeuscht-517094.html

[33] Sinn H.W. (2020). Das grüne Paradoxon: Plädoyer für eine illusionsfreie Klimapolitik. München.

[34] Felbermayr G., Peterson S. (2020). Economic assessment of Carbon Leakage and Carbon Border Adjustment. IfW Kiel for the European Parliament. URL: https://www.europarl.europa.eu/RegData/etudes/BRIE/2020/603501/EXPO_BRI(2020)603501_EN.pdf

[35] Kofner Y. (2020). Back to the future: German ordoliberal industrial policy. MIWI Institute. URL: https://miwi-institut.de/archives/789

[36] Lomborg B. (2021). False Alarm: How Climate Change Panic Costs Us Trillions, Hurts the Poor, and Fails to Fix the Planet. New York.

[37] ifo Institut (2017). Auswirkungen eines Zulassungsverbots für Personenkraftwagen und leichte Nutzfahr-zeuge mit Verbrennungsmotor. URL: https://www.ifo.de/publikationen/2017/monographie-autoren-schaft/auswirkungen-eines-zulassungsverbots-fuer

[38] DLR (2019). Studie Tankstelle der Zukunft. Mobilitätstrends 2040. URL: https://www.aral.de/con-tent/dam/aral/business-sites/de/global/retail/presse/pressemeldungen/2019/Aral_Studie_Tank-stelle_der_Zukunft_2019.pdf

[39] Grand View Research (2018). Internal Combustion Engine Market Size, Share & Trends Analysis Report 2018 – 2025. URL: https://www.grandviewresearch.com/industry-analysis/internal-combustion-engine-market

[40] BMWI (2020). Die Nationale Wasserstoffstrategie. URL: https://www.bmwi.de/Redaktion/DE/Publikatio-nen/Energie/die-nationale-wasserstoffstrategie.html

[41] Fraunhofer UMSICHT (2021). Leitprojekt „Verbrennungsmotor für die Mobilität der Zukunft“. URL: https://www.umsicht-suro.fraunhofer.de/content/dam/umsicht-suro/de/documents/Infomate-rial/Gr%C3%BCner%20Verbrenner_DE.pdf

[42] IW Köln (2018). Synthetische Energieträger – Perspektiven für die deutsche Wirtschaft und den internationalen Handel. URL: https://www.iwkoeln.de/studien/gutachten/beitrag/manuel-fritsch-thilo-schaefer-perspektiven-fuer-die-deutsche-wirtschaft-und-den-internationalen-handel.html

[43] See, e.g.: GE (2021). Decarbonizing gas turbines through carbon capture. URL: https://www.ge.com/content/dam/gepower-new/global/en_US/downloads/gas-new-site/future-of-energy/decarbonizing-gas-turbines-ccus-gea34966.pdf | IAE (2021). Zero-emission carbon capture and storage in power plants using higher capture rates. URL: https://www.iea.org/articles/zero-emission-carbon-capture-and-storage-in-power-plants-using-higher-capture-rates | Sharma S., Maréchal F. (2019). Carbon Dioxide Capture From Internal Combustion Engine Exhaust Using Temperature Swing Adsorption. Frontiers in Energy Research. URL: https://www.frontiersin.org/articles/10.3389/fenrg.2019.00143/full | Thilmany J. (2020). Clean Combustion: Trapping Carbon Emissions. ASME. URL: https://www.asme.org/topics-resources/content/clean-combustion

[44] Böhringer C., Peterson S. et al. (2021). Climate Policies after Paris: Pledge, Trade, and Recycle. IfW Kiel. URL: https://www.ifw-kiel.de/fileadmin/Dateiverwaltung/IfW-Publications/Sonja_Peterson/Climate_Policies_after_Paris__Pledge__Trade__and_Recycle/KWP_2183_EMF_overview_01.pdf

[45] Van Suntum U. (2021). Global climate fund for a more efficient CO2 reduction. MIWI Institute. URL: https://miwi-institut.de/archives/1325

[46] Mazzucato M. (2021). Mission Economy: A Moonshot Guide to Changing Capitalism. New York.

[47] See, e.g.: Kim M., Lee M., Shin Y. (2021). The 1970s Korean heavy industry drive. MIWI Institute. URL: https://miwi-institut.de/archives/1408

 | Liberal Mission Foundation (2021). Stagnation – 2: Consequences, Risks and Alternatives for the Russian Economy. URL: https://liberal.ru/ekspertiza/zastoj-2-posledstviya-riski-i-alternativy-dlya-rossijskoj-ekonomiki

[48] Bähr C., Bardt H. (2021). Standort Deutschland nach der Großen Koalition. IW Köln. URL: https://www.iwkoeln.de/studien/eine-bewertung-mit-dem-iw-standortindex-519229.html

[49] Berechnungen des Autors anhand von: Dorn F., Fuest C., et al. (2017). Die Beseitigung des Mittelstandsbauchs – Reformoptionen zur Einkommensteuer und ihre fiskalischen Kosten. ifo Institut. URL: https://www.ifo.de/DocDL/sd-2017-09-dorn-etal-mittelstandsbauch-2017-05-11.pdf

[50] Die Berechnungen zur kompletten Abschaffung des Solidaritätszuschlags und zur Senkung der Körperschaftssteuer basieren auf: Hentze T., Kolev G. (2021). Wirtschaftliche Effekte des BDI-Steuermodells der Zukunft. IW Köln. URL: https://www.iwkoeln.de/studien/tobias-hentze-galina-kolev-wirtschaftliche-effekte-des-bdi-steuermodells-der-zukunft.html

[51] Berechnungen des Autors anhand der Strompreisstruktur (Durchschnitt, 2015-2019) nach: Faltlhauser M. (2020). Zahlen und Fakten zur Stromversorgung in Deutschland. Wirtschaftsbeirat Bayern. URL: https://www.wbu.de/media/news/positionen/publikationen/2020_ZahlenundFaktenzurStromversorgunginD2020.pdf

[52] Adepoju U. (2017). Ease of Doing Business and Economic Growth. Ottawa University. URL: https://ruor.uottawa.ca/handle/10393/37176

[53] Laaser CF, Rosenschon A. (2020).

[54] Eine Übersicht dazu: Kofner Y. (2021). Enabling massive infrastructure and human capital investment with a Deutschlandfonds. MIWI Institute. URL: https://miwi-institut.de/archives/1136 

[55] Eigene Berechnungen anhand von: Accenture (2020). Digitalisierung – Konjunkturmotor in der Krise. BMDW. URL: https://www.accenture.com/_acnmedia/PDF-127/Accenture-Digitalisierung-Konjunkturmotor-in-der-Krise-DE.pdf

[56] Belitz H. et al. (2015). Wirkung von Forschung und Entwicklung auf das Wirtschaftswachstum. DIW. URL: https://www.diw.de/de/diw_01.c.511167.de/projekte/wirkung_von_forschung_und_entwicklung_auf_das_wirtschaftswachstum.html

[57] Kofner Y. (2020). Benefits for Germany of a post-COVID EU region-to-region free trade initiative. MIWI Institute. URL: https://miwi-institut.de/archives/779

[58] Cornago E., Lowe S. (2021). Avoiding the pitfalls of an EU carbon border adjustment mechanism. CER. URL: https://www.cer.eu/insights/avoiding-pitfalls-eu-carbon-border-adjustment-mechanism

[59] Prime Minister’s Office of Finland (2020). Carbon Border Adjustment Mechanisms and Their Economic Impact on Finland and the EU. URL: https://julkaisut.valtioneuvosto.fi/bitstream/handle/10024/162510/VNTEAS_2020_48.pdf

[60] Kofner Y. (2021). German and EU supply chain laws will not help anyone, but harm everyone. MIWI Institute. URL: https://miwi-institut.de/archives/1005

[61] Sandkamp A. (2021). Lieferkettengesetz: Auswirkungen auf den Maschinenbau. IfW Kiel. URL: https://www.ifw-kiel.de/de/publikationen/kiel-focus/2021/lieferkettengesetz-auswirkungen-auf-den-maschinenbau-0/