CO2 pricing 'not a cure-all' says German industry association BDI

Influential German industry association BDI has published a paper on measures for CO2 pricing, recommending that the government continues to advocate a scheme that is "as global as possible" while conducting thorough analysis on its possible effects and risks. The industry association stressed that a CO2 price was not a "cure-all" and would only have an effect if consumers had realistic, more climate-friendly alternatives to choose from. The BDI said that the introduction of a national CO₂ price is "conceivable and doable", if it does not harm the international competitiveness of German businesses. The association did not come out in favour of either an emissions trading system or a CO₂ tax, but said it rejects purely raising taxes or introducing new ones. That the industry association was able to reach a consensus on the topic of CO2 pricing is in and of itself "remarkable", write Klaus Stratmann and Jürgen Flauger in Handelsblatt, as BDI's members stand for a broad spectre of opinions in climate and energy policy.

After shying away from the debate for a long time, Germany's political leaders are finally considering putting a price on CO2 to help reach the country's climate targets. Key decisions are set to be made at the government's climate cabinet meeting on 20 September. Ministries, major parties, research institutes and industry players have meanwhile all shared their ideas on how a carbon price should be designed. Germany’s powerful industry lobby BDI published a much-acclaimed in-depth study into the ways to decarbonise the German economy last year, saying that protecting the climate can benefit the economy under the right policy framework. Industry heavyweights including chemical maker BASF, HeidelbergCement, gas supplier Linde and steelmaker Salzgitter say they are prepared for profound emissions cuts, but still lack the necessary market signal from policymakers.