27 Mar 2023, 13:51
Julian Wettengel

German emissions trading revenues could add up to €227 bln by 2030 – researchers

Clean Energy Wire

German revenue from the European and national emissions trading schemes could amount to 227 billion euros for the years 2021-2030, said researchers from the government-funded Ariadne project. With a so-called climate premium (Klimageld) — a direct per capita payment to citizens — the revenues could be used to strengthen social acceptance for the CO2 price, cushioning costs for low-income households, they argued. The income could also be used to increase climate protection investments or reduce income taxes, said the researchers, who assessed five ways to use the revenues (climate premium, lowering electricity prices, lowering income tax, hardship compensation, support programmes). They looked at the administrative costs of the respective policies, who would benefit or burdened, or whether they gave incentive for investments. The researchers argued that high carbon prices would only be accepted by the population if they are perceived as fair and effective, and added that the climate premium would be especially transparent and visible.

The government parties had promised in their coalition agreement to introduce a premium as a mechanism to cushion the future rise in the national CO2 price for transport and heating fuels for lower-income consumers, and thus increase acceptance for this climate action instrument. However, a major hurdle is the question of how to get that payment to the population, as the German state lacks a central interface with all citizens. Economy minister Robert Habeck had recently said that a climate premium would not be in force before 2025. Germany is part of the European Union Emissions Trading System (ETS) for emissions in the energy sector and by large industry facilities. In addition, the country recently introduced a national carbon price for transport and heating fuels. The EU is currently implementing a reform of emissions trading, which would also set up a system for fuels from these sectors, so Germany’s price must be brought in line with the European plans. 

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