German emissions trading scheme for transport and heating would delay action several years – study
Clean Energy Wire
Introducing an emissions trading scheme for transport and heating in Germany would take at least two to three years due to "long and complex implementation", according to a study by the German Institute for Applied Ecology (Öko-Institut) commissioned by think tank Agora Energiewende*. As a result, "emissions trading in the heating and transport sector is useless as a short-term climate protection measure before 2020," says head of Agora Energiewende Patrick Graichen. The introduction of new laws, national elections in 2021, possible amendments of related EU regulation and setting up a system to monitor companies would, among other factors, make fast implementation unlikely. Opting for an integration into the EU Emissions Trading System (ETS) could drag on even longer, with an expected implementation period of three to four years, estimates the study. Adjusting Germany's existing energy tax system, on the other hand, "could be achieved in three months", making it a "much easier" short term option, Graichen said. The think tank therefore recommends that Germany adopt a two-stage approach, where an energy tax reform is implemented first and later replaced by an emissions trading scheme. This way, the country would also be granted a pilot phase to identify construction flaws.
A separate legal opinion by the Öko-Institut shows that introducing a CO2 surcharge on existing energy taxes would be allowed according to Germany's Basic Law. This possibility had been brought into question in recent CO2 price discussions.
Germany is currently debating how to introduce a price on CO2 in the country - whether in the shape of a CO2 tax or an emissions trading scheme. Key decisions are set to be made at the government's climate cabinet meeting on 20 September. Chancellor Angela Merkel has recently expressed a preference for emissions trading, saying "precision in reaching the target is better with allowances".
*Like the Clean Energy Wire, Agora Energiewende is a project funded by Stiftung Mercator and the European Climate Foundation.