Think tanks call for climate action law that includes CO₂ price for transport, buildings

[This article was based on the German version of the proposals. Agora Energiewende and Agora Verkehrswende published an English version on 15 May 2019.]

German energy and transport think tanks Agora Energiewende and Agora Verkehrswende* have called for the introduction of a framework climate action law to make sector-specific targets binding, including a price on CO₂ emissions in non-ETS sectors. The government has to act quickly: Germany must reduce greenhouse gas emissions by 25 million tonnes of CO₂ annually to reach its 2030 targets. “That’s more than double of what we currently achieve. It’s very ambitious,” said Agora Energiewende head Patrick Graichen in a press release. Energy taxes on petrol, diesel, heating oil and natural gas should be increased by introducing a surcharge of 50 euros per tonne of CO₂. The revenues should be paid back to citizens in the form of an annual 100 euro climate premium, except for the 20 percent of the population with the highest income. The think tanks also call for increasing Germany’s annual renewables expansion targets; enshrining the coal exit commission’s recommendations into law; tax rebates for the energy-efficient renovation of buildings; and a bonus/penalty system for the purchase of new cars: buyers of passenger cars with CO₂ emissions of less than 95 grams per kilometre would receive a bonus, while buyers of passenger cars with higher CO₂ emissions would pay a penalty. “We have taken care to ensure that the measures finance themselves as far as possible and that additional funds from the federal budget are needed to a limited extent only,” said Agora Verkehrswende head Christian Hochfeld.

Germany’s government is under pressure to complete a package of measures and legislation that will ensure greenhouse gas reductions of 55 percent by 2030, so as to avoid target failure and costly payments for emission allocations under the European Union’s effort-sharing regulation. Chancellor Angela Merkel’s grand coalition has promised to introduce legislation needed for Germany to reach its 2030 climate targets by the end of the year. Social Democrat (SPD) environment minister Svenja Schulze has called for a framework Climate Action Law and presented a first draft in February.

*Like the Clean Energy Wire, Agora Energiewende and Agora Verkehrswende are projects funded by Stiftung Mercator and the European Climate Foundation.