Economic Challenge Ahead?

The German Environmental Ministry came out today with a paper on how they intend to reach environmental goals over the next decade.  ARD (public TV, Channel One) covers the bulk of this.

First, a speed limit on autobahns of 120 kph.  Presently, you could say that 60-percent of all autobahns in German have 'no' limit (you are supposed to drive within a 'safe' speed based on conditions).  I would say around 20-percent of the autobahn have a limit of 130 kph.  The rest are 100, or in a renovation zone (60-to-80). 

Selling the public on the limit?  It'll be near impossible.  Four of the sixteen states might go along with this, but the bulk of them will say 'no way'.

Second, they want tolls on truck passage to rise sharply.  The cost of present tolls?  It goes directly back to consumers, and they pay the transport cost involved in products.  So if you asked for a 50-percent rise in the truck tolls....it'll go direct to consumers, and drastically raise the cost of products around the country.

Odds of selling this significant rise?  Maybe if you were talking 5-to-8 percent and doing it again in five years.....no one would say much.  But a big rise?  It'll be pushed back down by consumers.

Diesel fuel taxation at the pumps?  They are advocating a minimum of 70 cents on top of the present cost, and by 2030, it'd be at 1.19 Euro on top of the present rate of diesel fuel.  Again, this would go direct to consumers.

Then we come to gas tax increases.  They suggest two stages and that the end-result (2030) would be a rise of 47 cents on top of the present cost of fuel (1 liter of E10 unleaded is around 1.45 Euro today.....so it'd be 1.92 Euro per liter in less than ten years).

Acceptance of the rise in fuel?  Here's the problem in this 'Frankenstein-type' creation of a gas and transport tax situation....the intention is to force people into accepting battery vehicles.  But it might be ten years before wide acceptance starts to occur.  So you have to wonder.....as tax revenue ballons out over the decade, and suddenly people quit gas cars.....the lack of tax revenue will be driving the government to go in 2030....to find new avenues of mass taxation.  Taxes on electrical power consumption?

Creating a massive consumer mess down the 'road'?  Yes.  But here's the thing.....you'd have to go and convince the Bundestag in passing this.  The public reaction will be massive....just on the speed limit and the truck toll.  You could predict a political party hyping this....might lose five to eight points off their potential political standing, and lose massively in an election.