“No way around making energy more expensive to reach national climate targets” - commentary

The new federal government has to work out a comprehensive concept to secure the German industry’s competitiveness, write Christoph Schmidt and Steffen Elstner of the Rhineland-Westphalia Institute for Economic Research (RWI Essen) in a guest commentary in Süddeutsche Zeitung. A more ambitious and future-oriented economic policy is needed, and the climate-friendly decrease of fossil fuel use could be a high-priority goal – “with the important condition that energy-intensive industries still think it makes sense to invest in Germany,” they write. The coal exit and renewables expansion should not be considered goals in and of themselves, but instruments to reach the higher goal of greenhouse gas reduction. These instruments must be cost effective, write Schmidt and Elstner, adding that costs are an important instrument to coordinate the decisions of companies and private households. Climate and energy provisions in the new coalition agreement, however, “largely continue the expensive and inefficient policy of the past years,” they write. “In the end, there is no way around making energy more expensive to reach the national climate targets.”

Read the guest commentary in German here.

For background, read the CLEW dossier The next German government and the energy transition.