News Digest Item
19 Nov 2018

Think tank urges reform of Germany’s taxes and levies system to allow for effective carbon price

Agora Energiewende

The German system of taxes and levies needs a comprehensive reform to allow for the introduction of an effective carbon price without creating a major burden for power customers, think tank Agora Energiewende has found in an analysis. The think tank says “many arguments have been exchanged many times: it’s time for a decision” on a price scheme for CO2 emissions. While such a reform would have to “inevitably entail higher prices for diesel, petrol, heating oil, and natural gas,” it can be made “cost-neutral” for citizens by lowering their expenses elsewhere in the system of taxes and levies. A comprehensive reform “has remained wanting for years now but can be implemented quickly.” Agora says Germany will not be able to reach its 2030 emissions reduction target without carrying out reforms soon and warns that such a policy’s “potential for antagonistic media propaganda” must not deter policymakers from pursuing it.

Find the analysis in German here.

For background, read the CLEW article German env minister plans CO₂ price concept to boost climate action, and the factsheet Germany’s Climate Action Plan 2050

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