Next German govt should rely less on "rigid sectoral targets" for emission reductions – ifo

The president of the Institute for Economic Research (ifo), Clemens Fuest, calls for more commitment from the incoming German government to European policy in an opinion piece published in Handelsblatt. In terms of climate policy, a “new way of thinking” is needed, Fuest writes, arguing that current policies rely too much on rigid sectoral targets for emissions reduction and “blanket regulations and requirements that make climate protection unnecessarily expensive”. Instead, the incoming government should put more emphasis on the CO2 price and the Europe-wide emissions trading system (EU ETS) as instruments to reduce emissions, he writes. It should also push ahead with important investments in the expansion of infrastructure, such as charging stations for electric vehicles and railway lines. Fuest also calls for combining decarbonisation with a secure and competitively priced electricity supply for industry, as well as for investments in adaptation measures that can protect Germany against extreme weather events, such as floods and storms.