Climate package: CO2 price to bring 19 billion euros within two years

Tuesday, 01.10.2019

The cornerstones of the climate package of the grand coalition have been fixed, now it is about the concrete implementation. Among other things, the Cabinet must determine what the financing should look like. According to a report from the Handelsblatt, the government wants to launch a supplementary budget for the coming year to implement its climate policy.


According to this, the Federal Government expects the CO2 price of the buildings and transport sectors to bring in total revenues of € 18.8 billion by 2023. Together with the revenues from the trading of certificates in the energy sector and the withdrawal from a reserve of six billion euros in 2020, this is the main source of funding for the Energy and Climate Fund.

The newspaper relies on documents for the Cabinet meeting on Wednesday. It deals with the financial impact of the climate change package on the budget for 2020 and subsequent years. The package envisages measures amounting to more than 54 billion euros by 2023. The goal is for Germany to meet its climate protection targets for 2030. The cornerstones of the package had the Federal Cabinet last week decided.

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  Finance Minister Olaf Scholz (SPD) emphasizes in the draft for the Cabinet that all revenues from the CO2 price should flow either in climate protection measures or in the relief of the citizens, reported the newspapers of the spark media group. Also new debts are not provided. "The debt rule enshrined in the Basic Law will continue to be respected," according to the bill. Through the climate policy measures, the federal government is "giving a strong boost to the economy" and supporting German industry in the necessary structural change.

A CO2 price is intended to make climate-damaging fuels from oil, natural gas and coal more expensive – and thus create an incentive for the development and purchase of more climate-friendly cars and heaters.


  The climate package envisages investing ten euros per tonne of carbon dioxide (CO2) in the transport and heating sectors in 2021 – critics consider this price much too low. The price should rise to 35 euros by 2025 and be partly left to the market from 2026 in a trade in pollution rights, but initially capped at 60 euros.


In return for the CO2 price, among other things, the commuter tax allowance for long journeys is to increase, and the EEG levy to promote the green electricity from 2021 should also be lowered. The switch from old oil heating systems to more climate-friendly new models is to be promoted with an "exchange premium" of up to 40 percent of the costs. The coalition also wants to make rail travel cheaper and flights more expensive. The motor vehicle tax should be more geared towards CO2 emissions for new cars.


  The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, called for further steps towards climate protection. "A clear statement would be for example: From the year 2030, no new cars with internal combustion engine will be allowed more, as other European countries do," he told the "Neue Osnabrücker Zeitung". "That would be a framework that citizens and businesses could expect, so the federal government should improve its climate program." Opposition, environmentalists and trade associations had sharply criticized the government's climate concept.


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