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Do local fuel prices affect remote working behaviors and carbon emission savings? Evidence from German panel data

Author

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  • Schmiedeberg, Claudia
  • Schober, Dominik

Abstract

Given the importance of the transport sector for greenhouse gas emissions, both behavioral change will be needed to mitigate climate change in addition to technological innovation. We focus on the case of remote working as a less carbon-intensive substitute to commuting and analyze whether employees react to price incentives and work more from home in times of higher local fuel prices. Applying an instrumental variables approach based on panel data from Germany, we find moderate fuel price effects on remote working frequency, which are restricted to occupations with high skill- level and regions with limited alternatives to car commuting. We use these results to predict changes in remote working frequency as a consequence to increasing carbon prices as discussed for climate policy. Results indicate that even with ambitious carbon pricing, individual remote working frequency will increase modestly, causing only limited reductions in German national aggregate fuel and carbon emissions.

Suggested Citation

  • Schmiedeberg, Claudia & Schober, Dominik, 2026. "Do local fuel prices affect remote working behaviors and carbon emission savings? Evidence from German panel data," Discussion Papers 03/2026, Deutsche Bundesbank.
    • Handle: RePEc:zbw:bubdps:337463
    DOI: 10.71734/DP-2026-3
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    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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