CO2 price should replace levy to fund renewables expansion - state sec
Germany will have to replace its current renewables (EEG) surcharge model with more market and taxation-based mechanisms, using a CO2 price as an indicator, Jochen Flasbarth, state secretary in the environment ministry, said at a conference by Green Budget Germany in Berlin. After this year’s parliamentary elections in September, the current cap on renewables expansion ought to be removed to ensure Germany continues on its path to an electrified economy running on green power, Flasbarth said. Raising the expansion targets for renewable energy sources was the only way to increase the share of electric power supply in transportation and heating without simultaneously increasing emissions, Flasbarth said, dismissing the debate about rising power prices as “hysterical". Flasbarth conceded that the current EEG surcharge made electricity, the basis of Germany’s future economy, more expensive. “That cannot make sense,” Flasbarth added. Renewables expansion had to be funded by targeted taxes, for which a CO2 price would serve “as the leading indicator” based on which other fees and taxes could be adjusted. At the same time, the carbon price would steer the decisions of market actors “in the right direction” in terms of emissions reduction, Flasbarth added.
For background read the CLEW article Debate on financing renewables in new ways gathers pace in Germany.