Greenhouse gas reductions in Germany-lucky strike or hard work?

With greenhouse gas (GHG) emissions decreasing by more than 18% in the 1990s, Germany appears to be among the few industrialised countries which are on track to meet the targets they committed themselves to under the Kyoto Protocol. This achievement may appear less remarkable if one takes into account that Germany benefited from so-called "wall-fall profits", i.e. the breakdown and restructuring of the East German economy after reunification in 1990. Nevertheless, various policies at national, regional, and local levels were introduced in the 1990s in Germany, which also resulted in a reduction of CO 2 and other greenhouse gases. The objective of this paper is to examine the underlying factors for the GHG emission trends in Germany in the 1990s. In particular, it is estimated to what extent the observed reductions are wall-fall profits, and to what extent they are the result of policy measures. The findings indicate that wall-fall profits account for almost 50% of the reduction of all six greenhouse gases. This share increases to 60% if only energy-related CO 2 emissions are considered. At the same time, a diverse set of policies also had a significant effect on the reduction of greenhouse gases. Environmental policies directed towards non-CO 2 gases were as important as policies addressing CO 2 emissions. Overall, the contribution of all the policies combined was slightly higher than the impact of unification. Although Germany is on a reduction path to meet the Kyoto target, the likelihood of it achieving the more ambitious national target without additional policy efforts appears rather slim. © 2001 Elsevier Science Ltd. All rights reserved.