Expanding European emissions trade to transport and buildings “very difficult” – economists

Expanding the European Union emissions trading system (EU ETS) to transport and buildings as an instrument to reach climate goals would be an “ideal solution” in principle, but the necessary reform would be “very difficult” to enact in the European reality, write Ottmar Edenhofer and Nicolas Koch of the Mercator Research Institute on Global Commons and Climate Change (MCC) in a guest article in Die Welt. “Such institutional changes at EU level cannot be expected at present,” they note, and instead call for a national overhaul of Germany’s energy taxes and levies. “Otherwise, the enormous investments required for sustainable mobility will not get off the ground.”

After shying away from the debate for a long time, Germany's political leaders are finally considering putting a price on CO2 to help reach the country's 2030 climate targets. Many German politicians have called for extending the existing EU ETS as an alternative to a tax on CO₂ emissions to help reach climate targets in transport and buildings. Greenhouse gas emissions from transport, buildings, waste, some (smaller) industries and agriculture are currently limited by an EU-wide target and split up into member state specific targets under the EU Effort Sharing Decision/Regulation – i.e. non-ETS sectors. As Germany is set to miss this target, it might have to pay billions of euros for non-compliance.