Germany’s Social Democrats cast doubt over plan to return of CO2 income to citizens

The German government might not have enough money to pass on revenues from its national carbon price to citizens as a compensation for rising climate protection costs as planned, according to the Social Democrats (SPD), reports Zeit Online. The deputy leader of the SPD parliamentary group, Matthias Miersch, said the constitutional court’s debt ruling had "severely restricted the financial scope." The CO2 revenue "must now also replace missing funds for funding programmes and other measures," Miersch told RedaktionsNetzwerk Deutschland, according to the report. Proponents of the so-called “climate bonus” (“Klimageld” in German), which the government parties agreed in their coalition treaty, consider it a key measure to ensure popular support for climate policies.

In November, the country’s constitutional court ruled that the plan to transfer 60 billion euros to a special fund earmarked for climate and transformation projects was unlawful. In response, the government decided this week to cut spending on climate and transformation projects by billions of euros, and to raise the price of carbon emissions in transport and buildings from 30 to 45 euros per tonne next year, instead of the planned increase to 40 euros. Prior to the court ruling, finance minister Christian Lindner had said citizens could expect to receive a large part of the government’s CO2 revenue from 2025.

The German government was urged to quickly devise a plan on how to regulate and manage the start of the European Union carbon emissions trading system for transport and heating fuels in 2027. Measures need to be put in place to deal with a possible jump in prices of fuels such as diesel or gas used for driving and heating, think tank Agora Energiewende warned in a report. The researchers argued that the existing fixed national carbon price should increase more than is currently planned, but any rise must be accompanied by social compensation instruments, such as returning CO2 price revenues to citizens via per-capita payments.