Germany's finance minister says “restart” with massive climate investments needed to curb emissions

The investments in emission reductions by Germany's government need a "restart" that ends the current approach of "small measures" based on incentives, finance minister Olaf Scholz said in his opening speech that kicked off the so-called budget week in parliament to debate national spending in 2020. "More of the same will no longer help us," Scholz said with a view to the German government's strategy to induce climate-friendly activities through support programmes and tax rebates. He argued that massive investments in low-emission transport infrastructure, power and gas grids, renewables expansion and new technologies like Power-to-X are now needed to ensure the necessary changes take place over the coming decade. "We need generous and better support programmes as well as regulation that allows the transition," Scholz said, adding that a "national consensus beyond the government parties" was necessary to anchor climate measures in the state's long-term budget planning. The finance minister said Germany's Energy- and Climate Fund will pay for many of these measures and that the financial requirements would become clear only after crucial decisions taken by the country's “climate cabinet” on 20 September. Scholz said a pricing system for CO2 has to be part of the forthcoming climate policies, arguing that any measure had to be designed "in a way that works for citizens" and does not overstrain them financially. The pace Germany has shown in the past when expanding its railroad and highway network had to be repeated now when it comes to setting up more sustainable infrastructure, he added. "We didn't manage to take the necessary decisions in the past decades. There is now no more time to waste," Scholz said.
Meanwhile, news agency Reuters reported that the German government was considering the creation of new public agencies to finance infrastructure and climate action measures without taking on new national debt and to safeguard the country's balanced budget known under the term "black zero" (Schwarze Null). In order to bypass the country's strict budget rules with a "shadow budget," the newly created and independent agencies "would let Germany take advantage of historically low borrowing costs to spend more on infrastructure and climate protection," the article says.

Scholz said in an interview in early September that the government coalition between the SPD and Chancellor Angela Merkel's conservative CDU/CSU alliance could only continue if it achieved a "big coup" in climate policy. Crucial parameters of the budget are yet to be defined and it is still unclear how much will be spent on achieving Germany's 2030 climate targets. Economy minister Peter Altmaier (CDU) in early September proposed setting up a “climate foundation” with a volume of 50 billion euros, which would issue bonds with a 2 percent interest rate to citizens who want to invest in climate action.