German politicians welcome govt advisors’ call for CO₂ price

German politicians have largely welcomed the German Council of Economic Experts’ opinion on CO₂ pricing presented last week. The economists said Germany should introduce a price on CO₂ emissions in sectors not covered by the EU Emissions Trading System (ETS), but did not specifically recommend either a CO₂ tax or new emissions trading system.

In an interview with public broadcaster ZDF, Bavarian state premier Markus Söder said a carbon market was the better option because it can be better integrated internationally "and it has a better steering effect”. If a carbon tax were to be introduced instead, Söder said it would have to come with “clear compensation” for consumers, such as financial support for commuters.
Environment minister Svenja Schulze (SPD) said the expert opinion supported her view that a “socially just CO₂ price is possible if the government returns the money to citizens,” and that CO₂ pricing was not a “silver bullet”, Tagesspiegel Background reports.
The CDU’s deputy parliamentary group leader, Andreas Jung, said a CO₂ price had to be decided this year as part of a strong climate action law, Tagesspiegel Background reports in the same article. Jung is calling for a reform of Germany’s energy taxes and levies.
On Twitter, the Free Democratic Party’s (FDP) climate policy spokesperson Lukas Köhler welcomed the advisors’ recommendations, which he said “validated” his party’s position: “Expanding the emissions trade should be the paramount goal of all climate policy efforts.”

Having long shied away from the debate, German political leaders are finally considering a price on CO2 to help reach the country's climate targets. Major parties and research institutes are pitching their ideas for a carbon price, whether in the shape of a CO2 tax or a trading scheme. The government’s top economic advisors proposed that Germany should introduce a price on carbon emissions for sectors such as transport and buildings currently not covered by the EU ETS. This is seen as an interim measure, with the long term goal being an integrated European system that sets a single price across sectors.