IEA head urges German government to introduce climate bonus payments for citizens

The planned climate bonus (“Klimageld”) payment to return state revenues from carbon pricing to citizens as compensation for rising CO2 prices is an “excellent idea,” Fatih Birol, head of the International Energy Agency (IEA), told news agency dpa in an article on Zeit Online. High costs linked to the energy transition and decarbonisation for low and middle income housheolds should be compensated through targeted financial support in order to secure acceptance of climate policies, Birol said. “If we don't do this, the burden on people with low and medium incomes could create fertile ground for extreme political views, which in my view is a danger to our democracies," he warned. The IEA head said that he was aware of ongoing discussions about the climate bonus in Germany's government, expressing hope that these can be overcome quickly. 

Without providing a timeline or further details, the government had agreed on the per capita climate bonus in its coalition treaty as a social compensation mechanism to increase acceptance of carbon pricing. However, finance minister Christian Lindner (FDP) recently announced the coalition would not follow through with its original plan in the current legislative period, arguing that introducing the climate bonus would not be technically feasible before 2025. A key remaining question is how to ensure the money reaches all citizens, with the three coalition parties divided over the details. While the Free Democrats (FDP) favour a lump sum per capita payment, the Social Democrats (SPD) call for more targeted relief depending on income and wealth.