Power generation from lignite and hard coal was responsible for more than a quarter of German greenhouse gas emissions in 2016. Of all federal states, North Rhine-Westphalia is by far the largest carbon emitter. The Growth, Structural Change and Regional Development Commission (also known as &ldquo ... more

In a systematic European comparison of taxes and duties on passenger cars, Germany is in the lower third – Taxes on passenger cars neither raise enough revenue nor provide sufficient incentives for less polluting passenger car traffic. Germany needs to reform its passenger car and fuel ... more

Ten years after the worldwide financial and economic crisis was triggered by the American real estate market, real estate prices are rising around the globe. Concerns about a new housing bubble are growing. The present report based on OECD data for 20 countries demonstrates that this concern is not ... more

Private businesses’ nominal value added in Greece has fallen by 38 percent over the last ten years. Micro firms were hit particularly hard. Despite efforts to stabilize the macroeconomic environment, there are only weak signs of recovery. Future prospects are not much better, as—with the ... more

The cost of renewable energy technology has plunged in recent years. But the extent to which electricity consumers can benefit from the reduced costs depends on the design of renewable remuneration mechanisms. Calculations of a financing model show that the current sliding premium is leading to ... more

• Current DIW Weekly Report 33/2018
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Power generation from lignite and hard coal was responsible for more than a quarter of German greenhouse gas emissions in 2016. Of all federal states, North Rhine-Westphalia is by far the largest carbon emitter. The Growth, Structural Change and Regional Development Commission (also known as “Coal Commission”) among others are currently debating alternative pathways toward a coal phaseout to achieve the national climate targets. The Coal Commission has been tasked with submitting specific recommendations by the end of 2018. Supported by detailed model calculations, the present study shows that a rapid reduction in coal-fired power generation nationwide and in North Rhine-Westphalia is necessary to meet the climate targets in 2030. According to the German government’s climate protection plan, emissions in the energy sector must fall by about 60 percent as compared to 1990. The analysis also shows that a German phaseout promotes decarbonization and the expansion of renewable energies throughout Europe. And in North Rhine-Westphalia, a rapid coal phaseout will be necessary to meet the climate protection targets. All lignite power plants and many plants that run on hard coal could be shut down by 2030. The phaseout of lignite mining in NRW could be designed such that surface mine Garzweiler II would no longer engulf any villages; the forest in the Hambach surface mine that is worth conserving would also be saved.

Duties and taxes on cars are an important source of revenue for European governments and the tax systems are also designed with the goal of achieving environmental policy objectives. A systematic and quantitative comparison of passenger car taxation in 30 European countries shows significant differences among them. However, in almost every country, the use of vehicles with diesel engines is taxed less than that of cars with gasoline engines, and the share of fixed charges (on acquisition, registration, and ownership) is higher than the share of use-related levies. Germany has shifted its position with regard to both types of tax and now ranks low in terms of the overall tax burden. However, the German motor vehicle tax is neither fiscally profitable nor does it have the desired effect. Energy tax rates have remained the same since 2003 and its real value has declined by a fifth in real terms. With this in mind, both types of taxes are in need of reform and increasing the diesel tax should be a priority.

Ten years after the worldwide financial and economic crisis was triggered by the American real estate market, real estate prices are rising around the globe. Concerns about a new housing bubble are growing. The present report based on OECD data for 20 countries demonstrates that this concern is not unwarranted. In eight countries, including the United Kingdom and the USA, the evolution of real estate prices indicates that speculative investment behavior is at work. The continued high level of private household debt and low interest rates are evidence of a new bubble in those countries. There are also signs of this in Germany, but primarily in the country’s largest cities. The risk of a nationwide housing price bubble is assumed to be lower in Germany due to the country’s significantly lower level of private household debt. But since no suitable precautionary measures are in place, there is a need for action. Although it is now possible to cap lending, many market observers feel that the existing instruments could be reinforced. Capping the loan-to-household income ratio would be an especially desirable measure to prevent possible negative developments.