Climate package will lead to fiscal revenue loss in German states – Bundesrat

The federal government’s climate package will lead to fiscal revenue shortfalls in German states which have to be compensated, state representatives said in a debate in the Bundesrat, the council of state governments. State premier of Hamburg Peter Tschentscher (SPD) said expansion of public transport and support for energy-efficient modernisation of buildings are two elements that lead to “enormous” costs for municipalities and states. Winfried Kretschmann, Green premier of the southern state of Baden-Wuerttemberg, said: “The legislative package places a considerable burden on state budgets.” He added that the federal government would receive revenues from the planned CO2 price in transport and buildings, but not the states. “That is why I hope and wish that this package will go to the mediation committee,” said Kretschmann.

Many elements of the climate plan are most likely not subject to final state approval, such as the planned Climate Action Law and the CO2 pricing system for transport and buildings. However, state governments will have a say in a package of tax reforms, an essential part of the climate plan. The Greens are part of the government coalition in most states and could withhold consent. The Greens have vowed to try and amend the package. Should the Bundesrat object to the legislative drafts sent by the federal parliament (Bundestag), a mediation committee made up of 16 members from both institutions is tasked with trying to find a compromise.