Next German government must break “vicious cycle” of energy prices

The four parties that currently negotiate whether to form Germany’s next coalition government must adopt a programme designed to break the “vicious cycle” of energy prices, Michael Bauchmüller writes in an op-ed for the Süddeutsche Zeitung. A drop in demand for fossil fuels caused by an increased use of renewable energy sources and electric cars is likely to lead to falling oil prices, – with in turn could have grave consequences on ambitions to decrease the use of oil, Bauchmüller says. A new German ‘Jamaica coalition’government of the conservative CDU/CSU alliance, the pro-business FDP, and the environmentalist Green Party could counter this trend “by reducing power taxes and increasing the taxation of climate-damaging transport and heating fuels”, he argues. “If markets fail to give the signal as a low oil price cements the status quo, it will fall on policy to change the course”, Bauchmüller says.

Read the article in German here.

See the CLEW factsheets Germany’s dependence on imported fossil fuels and Germany ponders how to finance renewables expansion in the future for more information.