Identifying and assessing environmentally harmful subsidies in Germany: an overview of studies and their underlying methodologies in the energy and transport sector

Abstract:

The discussion on the reduction and reform of subsidies in Germany has gained momentum lately. It has repeatedly been suggested that environmental and wider efficiency consideration be taken into account in reform strategies. Yet, progress at reforming environmentally harmful subsidies seems to be slow overall. This paper provides an overview on monitoring and assessing environmentally harmful subsidies in selected German policy sectors and discusses the underlying study methodologies. For this purpose we first briefly deal with the concept of subsidy and the measurement of subsidies in general and illustrate the linkage between subsidies and their environmental effects. The main focus of the paper is then on the current state of subsidy impact assessment and/or related monitoring activities. We discuss studies relating to two different policy sectors, energy policy and transport policy. While no single best methodology exists, it is suggested that different approaches may fertilize each other.