28 May 2019, 14:20

Germany's Climate Action Law takes shape

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 Chancellor Angela Merkel's conservatives. They oppose the idea of a major climate law and want only laws specifying climate action measures for individual economic sectors. To overcome the climate action impasse, Merkel set up the so-called climate cabinet, a round of ministers with responsibilities relating to climate issues, such as the environment, transport, buildings and energy ministers. They are now tasked with deciding the "legally binding implementation" of Germany's climate targets for 2030. The timeline has already been pushed back, but Merkel said her cabinet would decide "one or several climate action laws" before year-end. [Updates developments to May 2019.]

Content:

  1. Dead before arrival?
  2. How has the Climate Action Law become a priority?
  3. Why introduce a federal climate action law?
  4. What will it look like?
  5. Other things the law will include, or omit - 2050 climate neutrality and CO₂ pricing
  6. When will the law be enacted?

 

Germany’s climate protection policies are embedded in a multitude of national laws and decisions, EU regulations and international agreements. Several states have their own climate action laws, but there is no federal German climate law yet, like the UK’s 2008 Climate Change Act, one of the world’s earliest comprehensive framework laws on climate change.

Germany’s national climate targets were set down in 2007 and have been upheld by every government since. To make these climate targets binding, and translate EU goals into national regulation, German environment minister Svenja Schulze has presented the first draft of a German climate action law in February 2019.

Dead before arrival?

Schulze has said the law will be a “milestone of German climate policy”, and will “surely be one of the biggest tasks of this legislative period.”

Schulze aims to introduce a single big framework climate law like in the UK, as well as an accompanying cabinet programme of climate action measures for the economic sectors. Until now, Germany’s greenhouse gas reduction targets have been laid down in non- legally-binding government plans.

The framework law would enshrine the goals in law for the first time, which would make it harder for future governments to change course. The law could also introduce sanctions if targets were missed – such as making the relevant ministries financially responsible, or having them introduce emergency programmes – and it could include an independent expert council to assess the results of government climate action.

While the process overcame a first hurdle when Schulze presented her draft to the chancellery for early coordination in mid-February 2019, the Social Democratic minister’s submission was accompanied by fierce criticism from conservative lawmakers.

Some politicians from chancellor Angela Merkel’s CDU/CSU alliance oppose the idea of a single big framework law. They do not support Schulze’s idea to make ministries financially responsible for reaching climate targets in their relevant economic sectors, and would prefer to focus on the political programme of measures by introducing several ‘climate measure laws’ instead. This would mean that Germany’s targets are not enshrined in national law, there is no independent body to monitor progress, and it is unclear what happens in case of missed targets.

To overcome the climate action impasse, Merkel set up the so-called climate cabinet, a round of ministers with responsibilities relating to climate issues, such as the environment, transport, buildings and energy ministers. They are now tasked with deciding the “legally binding implementation” of Germany’s climate targets for 2030 before the end of 2019. The climate cabinet is also debating the introduction of CO₂ pricing for transport and buildings.

Schulze’s draft is not on the official agenda of the climate cabinet, and the debate about whether or not Germany will get a major climate law is ongoing. In a surprise move – backed by the results on the day after the election – Schulze sidestepped Merkel at the end of May 2019 and sent the draft to her cabinet colleagues for consultation - without chancellery consent. “As the responsible minister for climate action, I can no longer show consideration for the sensitivities in the [conservative CDU/CSU] union,” she wrote on Twitter. “I cannot justify wasting any more time on this.”

These developments mean that the detailed content and concrete design of Germany’s climate action legislation and accompanying measures and regulations have yet to be decided.

Overview of which countries have implemented climate action laws. Source: Ecologic, 2018.
Overview of which countries have implemented climate action laws. Source: Ecologic, 2018.

How has the Climate Action Law become a priority?

Environmental NGOs, including Friends of the Earth Germany (BUND) and WWF, have been calling for a climate action law for years, and research institute Ecologic prepared a legal opinion on how to adopt the British model into German law in 2009. From that point on, the Greens, Social Democrats (SPD) and the Left Party have all pushed for the introduction of a federal climate action law.

The SPD, then in the opposition, organised a conference and published a position paper on the topic in 2010, calling for a law that includes 2020 and 2050 greenhouse gas reduction targets, in order to create investment and planning security. During  a parliamentary debate in 2010, politicians from the SPD, Greens and Left Party criticised that Germany’s climate targets had so far been only “non-binding political guidelines” from government, which needed to be made legally binding.

In its 2013 election campaign programme, the SPD again called for the law. However, during coalition talks with the CDU and CSU, negotiators agreed to introduce the government’s Climate Action Plan 2050 – a cabinet decision that is not legally binding but sets out targets and policies for subsequent governments – instead of a law.

The current government finally committed to introducing climate action legislation in its coalition agreement of March 2018. The CDU/CSU and SPD renewed their grand coalition and put a clear emphasis on reaching 2030 climate targets. To this end, the government has set up the coal exit commission and similar multi-stakeholder bodies for transport and buildings to propose concrete measures to reach sector-specific goals.

“On this basis, we want to pass a law that guarantees compliance with the climate protection targets for 2030. We will adopt a legally binding implementation in 2019,” the coalition agreement says.

Photo shows Germany's government cabinet in 2018. Photo: BMU 2018.
With the 2018 coalition treaty, Angela Merkel's government promised to introduce a climate action law. Photo: BMU 2018.

Why introduce a federal climate action law?

Environment minister Schulze has said Germany’s climate action needs to become “more binding, so that we actually implement what we have committed to internationally.” The minister wants to draft the law in such a way “that we can reach our targets in a plannable, reliable and fair manner.”

The EU’s 2030 climate targets are already legally binding for Germany. For sectors included in the European Union's emissions trading system (EU ETS) – power production, energy-intensive industry and civil aviation – there is a combined EU target to cut greenhouse gas emissions by 43 percent over 2005. For non-ETS sectors, such as transport, buildings and agriculture, each country was assigned its own target. Germany must reduce greenhouse gas emissions from all non-ETS sectors combined by 38 percent by 2030, compared to 2005 levels.

The EU Effort Sharing Regulation translates this commitment into binding annual greenhouse gas emission reductions for each EU member state from 2021 to 2030. In years in which emissions are lower than the allocation, countries can bank surpluses and use them later. In years where emissions are above the annual limit, states can borrow a limited number of allocations from the following year, or buy allowances from other countries. This makes climate action relevant to national budgets, and potentially expensive for countries that widely miss their targets.

The Climate Action Law is to divvy up Germany’s annual targets and CO2 budgets between economic sectors. In 2016, the government’s Climate Action Plan 2050 set targets for each economic sector to achieve by 2030, but did not break them down into annual budgets. Schulze now wants to do this, and make it legally binding. “Falling annually, the total amount of CO₂ emissions still permissible will be clearly regulated by the [climate action] law, and distributed across the transport, industry, energy, buildings and agriculture sectors,” she told Tagesspiegel Background.

Table shows German greenhouse gas emission reduction sector targets for 2030, and 2018 status. Data source: BMU 2016, UBA 2019.

Thus far, climate action has often been seen as the sole responsibility of the environment ministry. The new law will create a “binding timetable which obligates government as a whole,” Schulze said during a keynote speech about her priorities as minister. “I will make sure that no minister can continue to shirk responsibility and delegate climate action to others.”

What will it look like?

The term Climate Action Law doesn’t always refer to a single law. Merkel said her cabinet would decide “one or several climate action laws” by the end of 2019.

According to the environment ministry, the climate action law package is expected to consist of three elements, Karsten Sach, director general in the German environment ministry (BMU) said at a conference in Berlin:

1) A framework climate action law
2) A programme of measures to help ministries reach the targets for their respective sectors
3) One or more legislative acts that amend existing legislation in line with the proposed measures in affected policy areas

1)  Climate Action Law - details from a first draft

Environment minister Schulze submitted a first draft to Chancellor Angela Merkel in mid-February 2019. It has been met with intense criticism from members of chancellor Merkel's conservative CDU/CSU alliance.

General purpose of the law

  • Guarantee Germany fulfils national and European climate targets “to safeguard against the effects of global climate change”
  • Support Paris Agreement target to limit global warming to well below 2°C and possibly to 1.5°C
  • Reach net-greenhouse gas neutrality by mid-century

Enshrining Germany’s national greenhouse gas reduction targets in law

  • At least 40 percent reduction by 2020, compared to 1990; 55 percent by 2030; 70 percent by 2040 [already existing government goals, so far not enshrined in law]
  • Proposal to pin down 2050 target to 95 percent [so far, official target is 80-95 percent]
  • Introduce goal of net-greenhouse gas neutrality by 2050

Sectoral emissions reduction targets

  • Divvies up Germany’s climate target between economic sectors (energy, buildings, transport, industry, agriculture, waste and other), as in Climate Action Plan 2050
  • Breaks up sectoral targets into annual emissions budgets [linear reduction, except for energy sector – here “ideally constant” reduction]
  • In case of target miss or overshot, difference will be “evenly spread over the remaining annual emissions budgets of the sector” until next climate target year (2030, 2040, 2050)
  • Federal government may change annual budgets, as long as this still guarantees reaching 2030/2040/2050 targets

Responsibility for sector targets with federal ministries

  • Ministry most responsible for sector also responsible for reaching sector target
  • Ministries must introduce necessary measures to achieve greenhouse gas reductions in their respective sectors
  • If Germany misses annual emissions reduction target (all non-ETS sectors combined) under the EU Effort Sharing Regulation, federal government must buy emissions allocations from other countries – these costs will be covered by budgets of responsible ministries, according to degree of non-compliance

Programme of measures to reach climate targets

Emergency programme in case of target miss

  • In case of target miss, government must introduce emergency programme within 6 months of publishing of emissions data to ensure targets are reached in following years

Monitoring

  • Government publishes annual climate action report (with emissions data, status of implementation of climate action measures, and effectiveness)

Independent expert body for climate issues

  • Independent seven-person expert body for climate issues will be set up by federal parliament (experts for environment, sustainable development, consumer issues and economic development, etc.)
  • Body examines existing/planned climate action measures regarding their effectiveness
  • Publishes annual report to evaluate climate action/make recommendations
  • Can address other climate policy issues, evaluate federal legislation regarding effects on climate change

Other key parts of the law

  • State institutions must take Climate Action Law into account for all decisions and plans
  • Federal administration aims to become climate-neutral by 2030
  • Federal institutions must explain how their capital investments take into account climate targets/climate change risks

2) Programme of measures to reach 2030 targets

  • Catalogue of measures to reach 2030 targets in each sector, as set out in Climate Action Plan 2050
  • Will be a cabinet policy decision, not law, according to environment ministry [can be introduced quicker, changed regularly as necessary]
  • Each ministry presents measures, environment ministry examines and assembles catalogue –
  • Ministries take into account outcome of multi-stakeholder task forces on coal exit, transport and buildings sectors for their measures

3) Amendments to existing legislation

  • One or several acts that amend existing legislation affected by Climate Change Act and/or programme of measures.
  • Likely to be drafted by the relevant ministries
  • Could take the second half of 2019 or longer to make all these changes

 

German energy and transport think tanks Agora Energiewende and Agora Verkehrswende* have presented several provisions they believe should be included in a climate action legislation to be passed this year. They 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. 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 in 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.

Other things the law will include, or omit - 2050 climate neutrality and CO₂ pricing

Climate Action Law proposals by the SPD from several years ago, as well as other parties and NGOs, included a greenhouse gas reduction goal for 2050, and many would like the new legislation to do this as well. However, many Conservatives and industry representatives oppose including an ambitious long-term goal. The draft now submitted by Schulze pins down Germany’s mid-century goal as at least 95 percent. Currently, the country aims to cut greenhouse gas emissions by 80 to 95 percent by 2050 which is too great a range for making specific sector targets. Chancellor Merkel has said Germany must soon make a decision. At the tenth Petersberg Climate Dialogue in May 2019, Merkel said that her new climate cabinet will debate how Germany could reach climate neutrality by mid-century. Merkel defined climate neutrality as ensuring that greenhouse gas emissions that remain by 2050 are stored (CCS) or compensated, for example through afforestation.

The Greens have called for the law to include some form of national CO₂ pricing reform. Schulze has repeatedly called for a discussion on this, but Merkel's conservatives have long shied away from what tabloids have already dubbed “yet another tax blow” for fear of angering voters. Merkel herself has now announced a willingness to look into CO2 pricing as way to reach Germany’s 2030 climate targets - and implied that such a price could be an alternative to a sector-specific approach. The concrete concept, however – whether it be a new CO₂ tax or a cap and trade system – is heavily disputed, even within the Merkel's CDU.

Some environmental groups want Germany’s climate and emissions targets to be legally binding, so they can go to court if the country falls short of targets.  They see the planned law as an ideal way to establish this. However, Brigitte Knopf, secretary general of the Mercator Research Institute on Global Commons and Climate Change (MCC), said it is “hard to imagine” government would introduce a law that enables citizens to sue the German government over climate targets.

When will the law be enacted?

The CDU/CSU and SPD coalition agreement calls for passage of the legislation in 2019. This is becoming less and less realistic. As the ministries have delayed their contributions, talk has shifted to introducing the necessary legislation into parliament by the end of the year.

As the package will include several elements, milestones for each could be different:

The environment ministry presented a first draft of the framework Climate Action Law in February 2019. It was sent to the chancellery for early coordination, but not released to other ministries for further consultation. After the European elections in May of the same year, Schulze decided to sidestep common practice and release it to her cabinet colleagues without chancellery consent.

It is unclear whether the draft will be debated by the climate cabinet.

Once in parliament, the law is subject to the usual legislative process, which includes several readings in plenary and might call for expert hearings in committee.

The programme of measures to reach 2030 targets has already been delayed by Germany’s coal exit commission, and slow progress by the government task forces on mobility and buildings. Originally, relevant ministries were meant to deliver proposals for their individual sectors by the end of 2018. These are now scheduled for delivery to the climate cabinet for its meeting on 29 May. Afterwards, the environment ministry needs time to examine the proposals to see if they are sufficient for the sectors to reach their climate targets.

The act to amend existing affected legislation will follow last. This process could drag into 2020.

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

All texts created by the Clean Energy Wire are available under a “Creative Commons Attribution 4.0 International Licence (CC BY 4.0)” . They can be copied, shared and made publicly accessible by users so long as they give appropriate credit, provide a link to the license, and indicate if changes were made.

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