Triple dividend for Germany’s mobility economy

By Christian Hochfeld, director of Agora Verkehrswende 

Climate protection was not a major topic in the German federal election campaigns or in the formation of the new government. But it will be crucial to the government’s success. This is because the special funds, investment offensives for infrastructure, tax breaks and planning accelerations announced by the governing coalition will only pay off if they translate into political value.

There are considerable political challenges in the transport sector. First, the automotive and mobility industry is the powerhouse of Germany’s industrial base, and it is currently undergoing the greatest structural change in its history. Second, confidence in government action is dwindling at a time when bridges are seen to crumble and trains and buses do not run reliably. Third, the transport sector is deviating further and further away from the path to climate neutrality by 2045.

According to estimates by the German Council of Experts on Climate Change, the country will miss its CO₂ target for transport by a cumulative 167 million tonnes by 2030. That is more than the sector’s most recent annual emissions. Currently, other sectors including energy and industry are offsetting transport emissions in the overall balance, but this will not last much longer. Some savings made between 2021 and 2024 are due to the COVID-19 pandemic and a weak economy. If the economy picks up again soon without new climate protection measures, this buffer will be used up long before 2030.

If politicians value strong economic growth, their policies should incorporate more climate protection. A euro can only be spent once – whether on roads, railways, cycle paths, cars, lorries, buses or rail vehicles. Investments in fossil fuel technologies and emission-intensive infrastructure are likely to lose value quickly and generate follow-up costs.

The CDU, CSU and SPD commit to the goal of climate neutrality by 2045 in their coalition agreement. They emphasise that they want to combine climate protection with economic competitiveness and social balance. But this triple goal is only highlighted in the chapter on climate. This suggests that while climate protection should not impede economic recovery, economic growth should be given free rein, with no regard for the climate crisis.

A sustainable economic recovery, however, must balance all three aspects – economy, climate and social issues. Doing so promises many advantages, especially in transport. The Verkehrswende – i.e. the political project of transitioning to a climate-neutral transport system by switching from fossil fuels to renewable energies and shifting to environmentally friendly modes of transport – is much more than a climate or transport-specific policy aim. It is a project for the future that will benefit public finances and infrastructure investment, competitiveness and jobs, energy supply and purchasing power, quality of life and social cohesion.

A key example is the competitiveness of the automotive and transport industry, which a rapid transition to electric mobility would best guarantee. Vehicle batteries are flexible charging and storage units that can facilitate the operation of the electricity grid and reduce costs. The circular economy of critical raw materials has potential to become a high-tech industry. Hydrogen-based renewable fuels are needed in large quantities in air and sea transport. Autonomous driving can supplement public transport to promote social participation, especially in rural areas.

This all requires reliable long-term investment conditions. The coalition agreement points in this direction without defining a clear path forward. The more attention is paid to long-term value-preserving factors including climate protection and social balance in transport sector investments, the sooner a triple dividend can be realised – for the economy, society and the climate.

This article was originally published in German as a viewpoint on T-Online on 30 July 2025.