Apart from the war and the energy crisis, hardly any other topic has caused as much of a stir in the German media and politics this summer as the 9-euro-ticket.
The 9-euro ticket, which cost 9 euros per month, was a special offer limited to 3 months, June till August 2022. It was valid throughout Germany on local and regional public transportation and valid for all German cities and regions. Long distance public transportation services, such as the ICE were not part of the public transport scheme. As the cost of living has risen significantly in Germany this year, the German government has introduced the scheme as direct financial relief to citizens.
While it would already be an interesting topic to investigate which media outlets argue for the 9-euro-ticket and which magazines argue against it and which basis of argumentation they use, I will argue and defend why offers like the 9-euro-ticket are necessary to make public transport and traffic more sustainable and social. While the 9-euro-ticket undoubtedly increased the use of public transport, there are many articles that support the statement that the ticket does not generate a decrease in private transport. Some articles address where these discrepancies come from and conclude that there is an actual reduction of about 10%. So 10% of car trips in urban traffic were replaced by public offers after the introduction of the ticket. So while it is clear that the 9-euro-ticket increases public transport, still there is some discussion on the general outcome and the welfare the scheme creates vs. the costs of financing.
This essay will discuss the benefits of offering affordable public transportation like the 9-euro-ticket, but also analyze whether the 9-euro-ticket is the perfect solution. I argue that the scheme was one of the most progressive measures introduced by the German Government and why despite being socially and environmentally beneficial there are voices, backed by big corporate, arguing against it. Additionally, I assume that there is a level of utilization of public transport above which people switch back to private transport due to congestion and why this is mainly cars. So that incentives to increase public transport can also backfire.
Choice of Transportation
Articles criticizing the 9-euro-ticket often mention that despite more public transport being used, there are no meaningful effects on other means of transport.
A study by the VGN GmbH, which referred to previous studies and formulated the questions of these studies better, so that the study participants have more answer options, has shown that there is indeed a reduction of individual traffic in cars, while the use of bicycles and e-scooters has stayed constant and the usage of public busses, subway and trains has increased significantly.
This study thus shows that such a tariff is certainly an effective means of creating incentives to abolish climate-damaging private transport. Thus, the 9 Euro ticket works exactly where it should. On the one hand, the citizens are relieved because the rising energy prices mainly affect car drivers and on the other hand, emissions are actually reduced.
When I saw this study, I noticed that the use of public transport has increased significantly but the use of cars has not decreased by the same percentage. On the one hand, this means that only some trips are replaced by public transport, on the other hand, it occurred to me here that there may be an overuse of public transport which incentives some passengers to switch back to the car.
In class we discussed the concept of Congestible Public Goods and found that there is an Optimal jurisdiction size. We have to adapt this concept a bit for the 9 euro ticket, but some of the findings also apply to public transport. Since public transport is not a pure public good, we can theoretically only apply the concept if public transport were free. Therefore, for my thought experiment, I would like to assume that instead, we introduce a 0-euro-ticket.
On the one hand, we can now also use the concept of optimal jurisdiction size for public transport, since with an increasing scope of ticket-validity, the costs for such a public good also increase and there will be a certain level at which the average costs have a minimum. Nevertheless, even in the context of exclusivity, public transport is not a pure public good. We therefore see a congestion arising with a certain level of use. What is exciting is that with public transport, even if there is still place (goods) available, i.e. every agent gets a good, the presence of many more passengers alone can reduce the benefit.
The problem I see here is that the passengers who have a problem with sharing transport with many other people are the citizens who like to travel privately, so they may like to travel by car. So on the one hand they have the possibility to use a car, this corresponds to low costs for looking for and using alternative transport, on the other hand they have a higher interest in exclusivity in transport. That’s why I assume that at a certain level, or at a certain price level, too many people use public transport so that some citizens in the higher income class might use the car again instead of the train. In the example of a 0-euro-ticket, it would only be a pure public good if the problem of non-rivalry was also solved. This would be the case if public transport options were offered to the extent that there are so many goods (seats) for agents that we no longer consider space in public transport to be rivalrous. So the underlying problem here is that the public transportation is no public good yet.
This thought experiment, without considering a significant increase in supply, brings us to a trade-off between a very affordable ticket that makes local transportation accessible to the lower income class and a ticket that is perhaps a little more expensive but has a stronger effect on the carbon footprint. To explore this in more detail, in the following section I will refer to the benefits the ticket had on the lower income class and then to the reduction of CO2 emissions. In my conclusion, I will look into this in more detail and give my own suggestions for solutions.
Social Benefits of the 9-euro-ticket
Although the 9-euro-ticket has been sold a total of 52 million times, many people still call it a social ticket, i.e. a ticket that primarily helps the socially disadvantaged. This is because we see a strong change in the use of public transport, especially among people in the lower income bracket.
The studies show that social contacts are strengthened, especially among socially weaker people. This goes hand in hand with increased participation in social life. However, this is by no means only true for people who receive unemployment benefits. Students like me also have the opportunity to visit a restaurant a few times more a month or to spend money elsewhere if they no longer spend 40-50 euros on local transportation, but 9 euros. From a distributional point of view, the ticket definitely makes sense because it has a positive effect on the social life of the lower income group. Although these people then actually spend their income elsewhere, so we are not simply redistributing but generating new expenditures through increased participation in social life, some politicians and magazines argue against these social distributions.
The problem here is that larger corporations and shareholders of big corporate have no interest in this spending, as this spending often occurs regionally at smaller businesses such as restaurants or in the theater. So even if we generate new spending, politicians have an incentive to argue against the spending.
Another argument that is often heard when it comes to the social justice of the redistribution of the 9-euro-ticket is that it is unfair if people in rural areas, who often have less use for such a fare, finance local transport in urban areas through their taxes. But this argument loses its credibility when we consider that this is the very essence of a tax state. Citizens finance the costs of others through their tax expenditures.
In my opinion, the 9-euro-ticket is socially one of the most progressive measures of the German government in recent years.
In this section I have argued why the 9-euro-ticket is a socially useful measure and refuted counter-arguments that have been spread by certain interest groups to deny the social impact of the ticket. However, I mentioned in the previous section that I believe there is a conflict between the social benefits and the emission-reducing effect of the ticket. Therefore, in the next section we will look at the environmental benefits of the ticket.
Environmental Impact of the 9-euro-ticket
While the social benefits of the 9-euro-ticket are very clear, it is not so clear about the effect on the climate and the environment. This is because the subject matter is ambiguous in terms of car trips saved. On the one hand, one could assume that we find the same interest groups here that also argue against the social aspects of the ticket, but it’s complicated arguing against climate protection in the media framework, so one must argue against the general effectiveness. I cannot say for sure whether this is the case, but I would like to refer to an article that I found particularly amusing.
This is translated as “First evaluations of scientific studies suggest that no climate protection is achieved with the 9-Euro-Ticket. According to this, the special ticket does not lead to people abandoning their cars.”
Without citing any sources, the headline “The 9-Euro-Ticket has no positive effect on the climate” is then used. I only want to use this example to show how opinions can be spread without any basis for argumentation.
Since, in my opinion, there is hardly any argumentation against climate protection measures in the interior of industrialized countries, I will skip further counterarguments and proceed directly with the examination of the effect of the 9-euro-ticket.
To examine the effect of the ticket on the climate, I will use the figures I already mentioned in the introduction.
The estimate is based on nationwide market research and the TREMOD model for calculating emissions consumption. Around 1 billion trips per month were made with the 9-euro ticket. This corresponds to the 10% of trips shifted from car to public transportation. This leads to a saving of 600,000 tons of CO2/month. While the publisher of the study compares this with the speed limit of 120 km/h on German highways, so that 3 months of 9-euro-ticket equals one year of speed limit, I have chosen the CO2 emissions of a German city as a benchmark. Germany has 80 major cities with a total of 26,600,000 people living in these cities, the average yearly emission in Germany is about 11 tons of CO2 emissions per person. So on average, Germany’s major cities have 332,500 inhabitants and the ticket would offset CO2 for 650,000 people per year, which is almost 2 major German cities.
Environmental Protection and Social Redistribution
In my introduction, I explained how, due to the existence of optimal utilization of public transport, the social component of the ticket potentially contracts with CO2-saving measures. In the last two sections, I argued why the 9-euro-ticket is an important social redistribution measure and why emissions are nevertheless also reduced. Since I assume that there is an optimal utilization of public transport, which may has been exceeded, I could now argue environment against social. However, instead of weighing these against each other, I would like to explain how these can be combined by further redistribution measures of the state.
In the section “Choice of Transportation”, I explained how we cannot yet understand public transport as a pure public good. In my opinion, public transport should remain cheap and become free for some people, especially people in need and students. This means that public transport needs to be financed in a different way and thus practically become a public good. For this to be possible, on the one hand, it must become accessible to all, i.e. it must no longer exclude some through the price mechanism, and on the other hand, its use must become non-rivalrous.
On the one hand, we need a stronger redistribution than we can see with the 9-Euro-Ticket, on the other hand, we need an expansion of the public transport system to avoid congestion. This way we can combine our two goals: social and environmental. In order for this to be possible, we need funds, and in order for this to be possible, the transport companies must no longer act according to the profit principle and we must, as already mentioned, understand public transport as a public good. The current problem is that transport companies are mostly monopolies and we already know from neoclassical economics that monopolies usually produce a market equilibrium that is socially too low. One possibility here would be the nationalization of transport companies, which some would consider a very strong measure, but there are also milder measures such as tariffs like the 9-euro ticket. The federal government has pointed out that this is a matter for the states. However, the 9-Euro-Ticket has shown exactly how effective a federal measure can be. In addition, a fundamental problem in German public transport is the tariff zones, which is why it can sometimes cost up to 100 euros a month to travel only a few stations if you leave your tariff zone. This is often referred to as tariff jungle.
So if we consider the direct redistribution measures to finance the 9-euro-ticket to be unsustainable, or want to think about other options, the argument that the 9-euro-ticket cannot be financed quickly comes up. This argument has also been made several times by the German finance minister and party leader of the FDP, which is a neoliberal dogmatic and radical representative of capital interests. I have briefly made a small calculation to refute his argument. The 9-euro-ticket has cost the federal government 2.5 billion euros in the 3 months in which it was valid. If we now extrapolate this to a year, we have to assume at least 10 billion euros, and if we include an expansion of the public transport system and, above all, an increase in personnel, 10 to 15 billion euros are realistic.
Between 2010 and 2021, the German military budget was increased from just over 30 billion per year to over 45 billion per year. In addition, the German military’s special assets are to receive a further increase of 100 billion euros. So when we look at these figures, the 9-euro ticket doesn’t seem that expensive at all. However, this again shows how capital interests are favored, since concessions in public transport are not worthwhile for big corporate.
In conclusion, it can be said that the 9-Euro-Ticket was a progressive test run, which showed how public transport can function and what problems arise, but above all what positive effects such a measure can have. However, we also see that the ticket was only valid for 3 months and was terminated after that. This shows that the capital interests of certain groups continue to be valued higher than the welfare of the population. A long-term solution requires an increase in the capacity of public transport so that there is no congestion which causes the opposite effect. Such an increase in capacity can only be achieved through redistribution and a paradigm shift in German politics that gives less power to big corporate and interest groups.
References
Website of the German Government : https://www.bundesregierung.de/breg-de/suche/faq-9-euro-ticket-2028756
Christian Schlesiger and Max Biederbeck : https://www.wiwo.de/politik/deutschland/oepnv-streit-das-statistik-raetsel-um-das-neun-euro-ticket/28638176.html
Transport association Nuremberg : https://www.vgn.de/neuigkeiten/9-euro-ticket-studie
German Public broadcasting : https://www.tagesschau.de/wirtschaft/unternehmen/9-euro-ticket-121.html
I wish to see effective public transportation that is fully supported by government with no interests with private groups. As the author mentioned, the seemingly practical and cost effective train systems of Germany was still stuck with corporate interest.
Thats true. Thats exactly the underlying problem we also see in most other countries. Traffic should not be left to its own devices, but we also don’t need market structures like monopolies and also competition is not the right model here.
The economic benefits of this ticket also seem clear: greater accessibility to cheaper transport, as you mention, frees up income to be spent in the local economy and in a cost of living crisis, we need people supporting local businesses who feel the proverbial pinch the hardest. Moreover, it can create greater access to employment which may originally be too far away and too expensive to commute to. I wish the UK would be as bold and progressive as our German friends with regards to rail transportation. It is so stupid and damaging for the environment that flying from the North of England to the South is much cheaper than taking the train. Progressive solutions like the 9 euro ticket should be embraced and trialled if we are committed to creating sustainable transport systems.
I agree with you on the potential of measures like the 9-Euro-Ticket, on an ecological, economic as well as social level. Also I think that the refocus towards a public-transport-concentrated urban policy is crucial. But still, in order to implement projects like this, it is fundamental to ensure and maintain the necessary infrastructural requirement because in the period of the 9-Euro-Ticket train stations and the staff were heavily overwhelmed and were not able to impose the measure which is often neglected in the debate about measures of this kind.
I think the article is well written and covers well the different aspects that the euro ticket price has affected. However, in the social part, it would be interesting to address the subject and especially to understand why so many people have not given up their car even though the price of public transport tickets is so cheap. It would be interesting to know the solutions that would push the most affluent to abandon the comfort of their car for a more ecological means of transport.
Great summary of the whole 9 euro ticket problematic. I would be very interested on your thoughts regarding the financial pragmatics on the topic. What do you make of the 49 euro ticket? What do you make of Mr. Scholz finally budging and giving in to offer financing this 49 ticket and hereby easing the financial load on the different regional governments?