German motorway speed limit could save billions

The introduction of a speed limit on German motorways would not only save around 33 million tonnes of CO₂ by 2030, but reduced demand for oil would also generate a “security dividend” of around €2 billion that would not have to be spent on the defence budget, according to a new paper published by the Kiel Institute for the World Economy.

The authors say that when European countries reduce their spending on oil by 1 euro, Russia loses about 13 cents in revenue for its state budget. In times of war, this reduction will likely be reflected one-to-one in Russian military spending. Lower Russian military spending in turn reduces the pressure on EU defence spending.

The bottom line, according to the paper, is that every euro of oil saved by the EU means a so-called security dividend of 37 cents. The EU could then reduce its security and defence spending by this amount without losing geopolitical strength relative to Russia. Or, conversely, every euro saved on oil has the same added value for the EU as 37 cents in additional spending on security and defence.