Moving too slowly on climate targets could become expensive - Court of Auditors

Germany’s Court of Auditors (Bundesrechnungshof) is warning of the potentially high costs to the federal budget of moving too slowly to reach climate goals, Malte Kreutzfeldt writes in taz. The report notes that the office has typically been seen as slowing down the energy transition by criticising its high costs. But an unpublished report on the environment ministry budget points to the rising costs of failing to hit targets. Much of these costs result from sectors not covered by the EU's emission trading scheme (EU ETS), such as the building and transport sectors, where states that do not meet targets will have to buy pollution rights from members that exceed their targets under the EU's effort sharing arrangement. About 240 million euros are allocated for this in the 2020 federal budget, the newspaper notes. Because targets tighten in the period from 2021 to 2030, there is a threat of “significantly higher risks for the federal budget,” the report quoted the auditors as saying. The authority estimated the number of “missing emissions allocations” at 270 million tons, meaning at an average price of 50 euros per ton this would cost about 13.5 billion euros.

In the German government's most recent budget for the years 2021-2024, no funds are allocated for the purchase of emission allowances under the EU effort sharing decision. The environment ministry said in September that it would resume talks on buying allocations from other countries once the first emission estimates for 2020 are published in March next year. Should, however, emissions fall about 10 percent from 2019 to 2020 – something that “should not be ruled out” due to the pandemic – there would be no need to buy allocations, the ministry said.

European Commission President Ursula von der Leyen has proposed to increase the bloc’s 2030 climate target to at least 55 percent. German politicians and industry have warned that the new, more ambitious target could overburden the economy, especially in light of the coronavirus pandemic. Environmental NGOs, however, have said is still not enough to meet Paris Climate Agreement goals. The government is supporting the more ambitious EU climate target.