Climate protection and the modern state: A hydrogen package for Germany

by Tom Krebs


1. MARCH 2021


This study develops a modern hydrogen strategy for Germany. The core of the hydrogen strategy developed here is a public hydrogen package that goes far beyond the current plans of the German government. The proposed hydrogen package consists of six measures and has a total financial volume of 100 billion euros by 2030 (10 billion euros annually). Three of the six measures relate to the expansion of public infrastructure and three measures can be assigned to industrial policy. From an economic and financial policy perspective, it makes sense to implement large parts of the hydrogen package by means of public companies. Furthermore, this study shows that only a modern climate policy can successfully link climate protection with economic prosperity. Such a climate policy – like the proposed hydrogen package – is based on the idea of the modern state. The modern state creates the necessary infrastructure so that the climate-friendly products of the future (green hydrogen) can be transported from the production sites to the consumers. In addition, it pursues a strategic industrial policy to create planning security and to stimulate targeted investment in climate-friendly technologies of the future.



During the high point of market orthodoxy, economists argued that the most 'efficient' way to combat climate change was to simply let markets determine the price of carbon emissions. Today, there is a growing consensus that prices need to be regulated and that a carbon price on its own might not be enough.