NGOs call on govt to soon start returning CO2 price revenues to citizens

Germany’s government should soon introduce a so-called climate premium (“Klimageld”) to return the revenues from the national carbon price on transport and heating fuels to citizens, said a group of civil society groups including Friends of the Earth Germany (BUND) and Germanwatch. “With a climate premium, CO2 pricing can be developed into an effective and socially just instrument for climate action,” said BUND managing director Antje von Broock. An annual per capita payment – the same amount for each person – means that people with lower and middle incomes are relieved more financially, as they statistically have a smaller CO2 footprint. At the same time, the rising CO2 price encourages the switch to climate-friendly means of transport and heating. The premium could be introduced with little bureaucracy, cost-efficient and legally secure, said the NGOs based on a report by the University of Administrative Sciences Speyer.

In its coalition agreement, the new government said it would develop a “Klimageld” as a social compensation mechanism to increase acceptance of the carbon price, but did not give any details or timeline. A major hurdle for its introduction is the question of how to get it to all citizens. The NGOs propose to set up a “climate premium register” with the tax authorities. “The majority of those entitled can be identified and entered in the climate premium register without an application procedure,” said the report.