Head of German Council of Economic Experts says chances greater than ever for introducing CO2 price

There has “never been a better time” to introduce a price on carbon dioxide emissions in Germany than today, the head of the German Council of Economic Experts (Wirtschaftsweise), Christoph M. Schmidt, says in a dpa news agency article carried by the Welt Online website. Reiterating earlier calls, the economist says carbon pricing remains the most cost-efficient measure to reduce greenhouse gas emissions. Schmidt says that while weaning the economy off fossil fuels and moving towards low-carbon energy sources by 2050 remains “the right goal,” the procedure would likely be complex and expensive. “We’re talking several trillions of euros here,” Schmidt says, adding that these must be balanced against possible costs due to climate-related damages and penalty payments for failing to abide by international emissions reduction agreements. However, he warns that Germany should not go it alone on carbon pricing as this would mean a decisive weakening of its industrial competitiveness.

Schmidt has long called for a price on CO2 [read this 2018 interview with CLEW]. He currently works on a report for the German government’s climate cabinet in which the benefits and drawbacks of a CO2 price in Germany are assessed. According to Chancellor Angela Merkel, the report will help the government decide whether to follow an emissions reduction approach that prescribes reductions targets for each sector of the economy or one that uses a general price on carbon emissions as its foundation.