Together with co-author Stefan Lamp, Ph.D., post-doctoral researcher at Universidad Carlos III de Madrid, Dr. Andreas Gerster investigates which impact an electricity tax exemption has on companies with high electricity consumption in the German manufacturing industry. They particularly focus on two main aspects: the companies’ electricity use and their competitiveness. The researchers observe an adverse effect with regard to the power consumption since companies exempted from the electricity tax significantly increase their energy use. Gerster and Lamp also compare two different policy designs: If companies are provided with incentives to reach a threshold to be eligible for a tax exemption, they intentionally consume more power as compared to companies with no such incentives. Competitiveness was measured by means of the following indicators: employment, sales and export. However, Gerster and Lamp do not identify any significant effect of the exemptions on the indicators mentioned above. Since the electricity tax exemption aims at improving the competitiveness, the researchers doubt the effectiveness of its present form.
The Joachim Herz Foundation honors the project as an important contribution to implement an electricity tax exemption that is environmentally compatible. Once every two years, the foundation awards outstanding interdisciplinary research in Economics with its German Prize for Economics.
You can find more information here (in German): https://www.joachim-herz-stiftung.de/was-wir-tun/wirtschaft-verstehen-gestalten/wirtschaftswissenschaften-querdenken/wirtschaftspreis/