For Europeans, It's No Car, No Problem

Energy efficiency is giving the Continent an economic advantage

FRANKFURT - I bought a car recently, which is noteworthy only because it's the first motor vehicle I've owned since moving to Germany in 1994. That I could happily live car-free all these years before finally succumbing to the demands of my daughter's social schedule says a lot about why Europeans use energy more efficiently than Americans.

In the U.S., doing without a car is a challenge in all but a few cities. But in Europe, swearing off gasoline is no big deal. Frankfurt, where I live, is a midsize city, with 670,000 people. Yet it has a denser network of subways, buses, and suburban trains than any U.S. city I know. There are bike lanes, a fleet of "Call a Bikes" you can rent using a mobile phone, and several car-sharing companies if you need your own four wheels.


As oil prices soar, Europe's quaint streetcars and bicycling commuters are emerging as a competitive advantage. The European economy needs 20% less oil than the U.S. to produce $1,000 worth of goods and services and 75% less than China, according to Swiss bank UBS (UBS). And while U.S. energy use continues to grow, in Europe it's falling. Last year, Germany's economy expanded by 2.6% but its energy consumption plunged 5.6%.

Europe's stingy energy use is simply a response to decades of high energy prices. People have smaller refrigerators and do without air conditioning (though that's admittedly easier, given Europe's often gray summers). Their homes have lights that turn off automatically and compact, on-demand hot-water heaters instead of big tanks in the basement. Even at Daimler's sprawling headquarters near Stuttgart, thick with car lovers, workers get around on bicycles.

I know a Frankfurt banker who cycles in daily from the posh suburb of Kronberg—and nobody thinks he's a tree-hugger. At the downtown high-rise where I work, which is filled with lawyers and brokers, hundreds of bikes are parked outside every morning. Bicycles are, after all, the only emission-free vehicles ever mass-produced, and the only ones that run on what you ate for breakfast.

In fact, transportation accounts for most of the difference between European and U.S. energy use. It helps that the Continent is densely populated, cities are close together, and Europe doesn't have the sprawling suburbs of American cities. But the difference is also due to sky-high taxes, which push the cost of gasoline to more than $9 a gallon in my neighborhood—a fairly typical price across Europe—so cars here get about twice the gas mileage that they do in the U.S. "We have higher taxes, and prices do most of the rest," says Paul De Grauwe, an economics professor at the University of Leuven in Belgium.

Now Americans are buying smaller cars, while U.S. cities are building better public transportation and accommodating cyclists. The lesson from Europe is that such measures provide a real economic payoff—and don't have to be excruciating. Even though I now own a slightly used Audi A3, I'll continue to cycle to work and use Germany's high-speed trains when I travel long distances. My own contribution to gross domestic product goes up when I can read and work instead of driving.

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