The discussion on the reduction and reform of subsidies in Germany has gained momentum lately and is taken up from different perspectives. On the one hand and quite irrespective of environmental concerns, far-reaching cuts are demanded, on the other hand the economic policy debate often focuses strongly on single cases and specific aspects of subsidiy design (e.g. the tax base for the German distance allowance). In the later case subsidies are also treated as a potential instrument of environmental policy or lists and case studies of subsidies with environmentally harmful effects are compiled. Yet, a number of intermediate and cross-sectional levels of discussion are often left out, which could potentially connect more abstract and more concrete approaches and attempts at subsidiy reform of different scope and with different consequences.
In his PhD-thesis, which was accepted at the University of Kassel, Tilmann Rave investigates in which way environmental concerns relate to subsidies and subsidy policy and what opportunities exist for environmentally oriented subsidy reform. In a systematic way linkages between subsidies and the environment, and environmental policy and “subsidy policy” are explored. Since these linkages are complex a priori and cannot be handled according to a single simple scheme, the subject matter is approached from different angles and with different methods. Following subsidy definition and a general overview on the subject at stake, basic structures of both policy fields are first described and development trends are traced in a historical-descriptive manner. Then the role of subsidies in various economic theories and concepts is discussed in a theoretic-deductive manner. Merging problem-based and theory-based lines of argument leads to a common reform perspective. According to this perspective there are good reasons to (politically) focus more attention on subsidies with negative environmental consequences and their reduction, and thereby concentrate on incentive constellations which are still mainly “outside” the existing German environmental policy. The perspective is concretised by means of an overview on impact analyses to identify specific environmentally harmful subsidies. Finally, an environmentally oriented reform process for subsidies is sketched. The boundaries between scientific evaluations, administrative and political reform efforts and decision making are highlighted in particular.
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