Merkel says Germany to decide between CO2 price and sectoral targets

The German government will decide whether to follow a sectoral emission reduction approach or a general pricing of carbon emissions in its bid to get on track in achieving the country’s binding 2030 climate targets, Chancellor Angela Merkel said at an event by the government’s sustainability council (RNE) in Berlin. “Transport, buildings and agriculture so far have no form of pricing but only a more or less effective mix of measures” to reduce CO2 emissions, Merkel said. The Chancellor added that the government had commissioned a comprehensive report on the effects and possibilities of implementing a carbon price in Germany, which would be discussed in the country’s so-called climate cabinet by mid-June, and serve as a platform for any further action. However, Merkel said that carbon pricing would be most effective in a joint European approach, which is why she would sound out the potential for collaboration with France and other neighbours in this regard.
The Chancellor stressed that rising allowance prices in the EU’s emissions trading system (ETS) had begun to show the effectiveness of such an approach, with German coal power exports dwindling and emissions clearly falling in 2018. “It will be interesting to see if this trend persists,” she said. With a view to the country’s proposed 2038 coal exit, Merkel said the government had an obligation to implement the coal exit commission’s proposal and to ensure that the country follows a “clear emissions reduction path” to avoid having to pay fines or buying allowances under the EU effort sharing scheme with money that could be spent much better on German sustainability projects. 

Merkel's climate cabinet has said it will make key decisions about climate action legislation and measures in September and adopt these by the end of 2019. Germany is under pressure to meet its goal of cutting greenhouse gas emissions by 55 percent by 2030, and Merkel’s government promised in its coalition agreement to introduce legislation by the end of 2019 to make sure the country reaches its climate targets. Merkel has set up the so-called climate cabinet, a group of ministers with key responsibilities for climate issues, which is to come up with climate action proposals and the necessary legislation by the end of the year. Germany's environment ministry wants to enshrine the country's climate targets in a new comprehensive Climate Action Law. A first draft was sent to the chancellery for early coordination in February 2019, and was met with heavy criticism from several members of Merkel's conservatives. They oppose the idea of a major climate law and want only laws specifying climate action measures for individual economic sectors.