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23 Sep 2019, 09:41
Sören Amelang Sven Egenter Freja Eriksen

Reactions to government agreement on climate strategy, CO2 pricing

The German government coalition has reached an agreement on the country's climate action strategy, including a pricing system for carbon emissions in all major sectors. The Clean Energy Wire presents reactions to the deal.

Politicians

Climate targets to be legally defined for the first time - environment minister Svenja Schulze

German environment minister Svenja Schulze said "Germany's climate targets are now going to be legally defined for the first time". It will "be clearly regulated what happens if an area deviates from the agreed climate course and if so, who has to make improvements and how."

Schulze also said the CO2 price was "not a panacea" but an important addition, adding that climate action is always the sum of many individual decisions on what to buy. "In the future, climate-friendly purchasing decisions will also be more profitable for the wallet. Nobody has to buy a new heating system or a new car immediately. But when the next purchase is due in a few years' time, it will be increasingly cheaper to choose a climate-friendly product."

"Our work is not done with the decisions of the climate cabinet. What matters now is implementation. It won't be a walk in the park, but a marathon for all of us."

 

"A decent package" – Friedrich Merz, prominent voice of the CDU's traditional conservatives, in a newspaper commentary:

"Germany is doing justice to its claim to be a pioneer. With a clear conscience, the country can call on other states at major conferences to do more as well. It remains to be seen whether the sum of the many individual decisions will be sufficient to move closer to the climate targets. What is important is that CO2 pricing is the decisive control instrument for reducing emissions sustainably in the long term.

Behind all the vociferous criticism and demands for radical solutions is not the desire for more environmental protection. Some are even saying it quite openly: It is about overcoming the system, about destroying our market economy […] But our industry stands first and foremost for state-of-the-art technologies and high investments into research and development. More protection for nature and the environment can only be achieved with, not without, or even against, the many engineers who search every day for ways to combine mobility, quality of life and climate protection. The alternative would be an unprecedented de-industrialization of our country, which would endanger millions of jobs and dramatically deepen the division of our society."

 

Think tanks, research institutes

Shockingly feeble climate package – Patrick Graichen, Director Agora Energiewende

“This climate package is shockingly feeble and fainthearted. In particular the proposed CO2 pricing is a bad joke: 10 Euros per tonne won’t do anything, the annual increases are so homeopathic that they are barely more than inflation. There is no progress for the expansion of renewables either – to the contrary the conditions for wind power are worse. That way the 2030 climate targets will definitely not be achieved.”

 

A document of political despondency – Ottmar Edenhofer, director MCC research institute

“The climate package is a document of political despondency. With this decision, the German government will not achieve the climate targets it has set itself for 2030. Even if the architecture of a comprehensive carbon pricing system becomes visible – entry with a fixed price, a national emissions trading scheme for transport and heating in the medium term and integration into the EU Emissions Trading System in the long term – the price path is too low and does not extend far enough into the future to have a steering effect. By contrast, a sensible entry price is 50 euros per tonne of CO2 and rises to 130 euros by the end of the next decade, i.e. 2030. The carbon price should be the core instrument of climate policy, but now it only has an alibi function. So there is a huge gap between the carbon price that is necessary and the price that is now being envisaged. It is unrealistic to close this gap within the framework of the planned monitoring process.

The Grand Coalition has not delivered on this central issue. This fact cannot be concealed by the large number of funding programmes announced – taken together, they will at most produce half of the CO2 reduction that has been agreed under the legally binding EU Effort Sharing Regulation. This does not avert the risk of multi-billion fines. Today, the Federal Government fails to give us and future generations the decisive answer to the question of ambitious climate policy."

 

"Short of what's necessary" - Claudia Kemfert, energy economist, German Institute for Economic Research (DIW) and Hertie School of Governance (on Twitter)

"The climate package falls short of what's necessary […] With emissions trading, a decision has been made in favour of a less effective instrument. It is not transparent, costs valuable time and is expensive and legally sensitive. It is therefore uncertain whether this instrument can be implemented at all […] The CO2 prices are much too low to have an effect, and the increase comes too late to reach climate targets."

 

"Far too cautious" - Christoph Schmidt, president of the Rhineland-Westphalia Institute for Economic Research (RWI) and head of the German Council of Economic Experts, in a press release:

"The decisions of the 'Climate Cabinet' show that the German government is seriously seeking suitable steps in climate protection policy, some of which point in the right direction. But the package is not the promised 'big leap.'  After all, this is not measured by the wealth of individual measures or their volume, but by whether the package ensures that the emission reduction bindingly promised in Europe by 2030 is achieved effectively and cost-effectively. Unfortunately, scepticism is called for here. [The package agreed shows] that politicians do not yet sufficiently trust the price signal. It is therefore far too cautious in its approach, watering down the price signal with a conglomeration of measures and burdening itself with too many detailed decisions."

 

Alexander Reitzenstein, Policy Advisor for climate and energy policy, E3G (told CLEW)

"At a time of unprecedented societal demand for more ambitious climate policies, the German coalition government has settled on a lowest common denominator. The proposed measures are clear progress, it is however quite unlikely that they will be enough to reach the domestic and European climate targets, notwithstanding the need for more ambitious targets to contribute to limiting global warming to 1.5 degrees... Germany’s climate package sends an ambiguous signal to European and international partners. While the country is clearly upping its game in a reaction to popular and international demand, the package does not put Germany on track to regain a position as a global leader in fighting the climate crisis."

 

Industry

"Not a huge step, but important decisions" - Dieter Kempf, president of the Federation of German Industries (BDI)

"The Federal Government's climate package is not the huge step it was billed to be, but it does contain important decisions for efficient and sustainable climate protection. What matters now is that the objectives and measures referred to be set out quickly and in concrete terms. Our companies need clarity quickly about burdens, relief and investment conditions [...] The agreed emissions trading for buildings and transport is an entry into a market-oriented CO2 pricing system. It is enormously important to understand this new national system only as an interim solution and to ensure it can be connected at European level."

 

By far not enough for efficient energy transition - German Industry Initiative for Energy Efficiency (DENEFF)

The German Industry Initiative for Energy Efficiency (DENEFF) welcomes the fact that the climate cabinet's 2030 plan includes some energy efficiency measures such as tax incentives for building modernisations, but it is "by far not enough for an efficient energy transition," said executive director Christian Noll.

"A consistent energy efficiency strategy is long overdue and must finally lay down ambitious and binding energy efficiency targets. The fact that these are no longer even mentioned, even though they are part of the coalition agreement, is frightening! A half-baked energy transition policy like this in triple steps will be significantly more expensive for everyone in the end," said Noll.

 

Marie-Luise Wolff, president of utilities’ association BDEW

"While today’s agreement contains a few important strategic decisions, the overall package is disappointing. The government is way too timid with the CO2 pricing and the necessary cuts in electricity prices. Also, the planned increase in tax breaks for commuters would counteract the timid burden on the CO2 emissions in the transport sector. The decisions on renewables aren’t sufficient either in order to reach the 2030 targets. In this area in particular, the government has failed to make a big leap.”

 

Carsten König, Executive Director solar association BSW

“The lift of the support cap for solar roofs will prevent a slump in the market at the very last minute, if it’s put into law immediately. But overall those key points remain rather timid and vague. Instead of starting the solar turbo drive, they create a lame patchwork.”

 

Klaus Müller, chairman, German consumers‘ association vzbv

"Today’s package falls well short of our expectations…. It’s still a long way from the climate action programme to a climate act. The introduction of CO2 pricing is the right approach…. We continue to demand that all proceeds will be handed back to consumers, otherwise there’s no incentive for climate-friendly consumption and no financial leeway for own initiatives…. Politicians have to set incentives for climate-friendly alternatives for consumers. Here the plan is a disappointment. It’s not the promised big leap.”

 

Michael Ebling, president of the German Association of Local Utilities(VKU)

"The approach of placing CO2 pricing in transport and buildings at the centre of climate policy is right," said Michael Ebling, president of the German Association of Local Utilities (VKU), adding that it is "also right to provide relief for the price of electricity." "However, the impression arises that it is a typo if the federal government aims to reduce the EEG levy by 0.625 cents/kWh by 2023. The EEG levy today is 6.4 cents/kWh. At present, the electricity price for German household customers is 44 percent above the European average. The planned relief for an average household amounts to just 20 euros per year."

The paper remains vague on the expansion of renewable energies, said Ebling. "Much more measures would be needed to lead wind energy out of the recession and not deeper into it. The industry has recently made comprehensive proposals. The German government urgently needs to do more here."

 

Simone Peter, president, German Renewable Energy Federation (BEE)

"The many small-scale approaches are far from sufficient to achieve climate action and renewable energy targets. An entry-level price of only 10 euros for CO2 is a manifestation of the German government's faintheartedness." The climate cabinet cannot conclusively explain how energy supply is to be constructed in the future and how security of supply is to be guaranteed, write BEE. The assumptions about electricity consumption are far too low, as the demand for clean electricity will increase as a result of power-to-x, e-mobility and renewable heating. "With today's announcements, the 65 percent expansion target becomes paper waste," said the BEE President.

 

Andreas Kuhlmann, head of the German Energy Agency (dena)

"The federal government's climate package could introduce a change of course. The necessary instruments for this are included: CO2 pricing and a variety of programmes that create options for consumers and industry to change course… What was politically possible today is very probably not yet enough to achieve the climate targets of 2030."

"With strong monitoring, the federal government wishes to give itself a new obligation and the possibility to readjust. This is a good approach."

 

Matthias Zelinger, executive director engineering association VDMA Power Systems

„The government lays the foundation for an urgently needed electricity-based climate-neutral energy use in transport, buildings and industry with the – very timid – introduction of a CO2 pricing and a slight cut to electricity prices through the renewables surcharge. An emission trading with price management is, however, a very complex system. The government must now prove, that this can work quickly.

“Higher renewables expansion capacities would have been important signal and is indispensible for the envisioned emission cuts.The 2030 target of 20 GW for offshore wind is good. But it should not constitute a cap.”

“For onshore wind, the package is counterproductive. General distance regulations, no binding easing of permission processes and a lack of capacity framework aren’t a positive signal…. Today’s signal put the wind industry at risk and contradicts the government’s and the state’s commitement at the recent wind power summit.”

 

Hermann Albers, president of the German Wind Energy Association BWE

"Increased tender quantities for onshore wind energy are necessary. These are, however, completely absent from the climate cabinet's concept. It is incomprehensible and grossly negligent that parts of the union were able to assert themselves and that further hurdles are being deliberately raised by introducing general distance regulations. This will plunge regional and state planning into chaos, endangering the entire industry."

 

NGOs

"Ridiculously low CO2 price" – Greenpeace Germany

The parties CDU/CSU and SPD in Chancellor Angela Merkel's grand coalition "lack the moral responsibility and the political courage to secure our future," said head of Greenpeace Germany Martin Kaiser. He criticised the proposal of a "ridiculously low CO2 price" which will remain "completely ineffective for another ten years" as it only makes petrol and diesel a few cents more expensive, while being offset by a higher commuter allowance.

Chancellor Merkel is only delivering "a bundle of key points and measures that fall miles short of the commitments made in the Paris Climate Agreement, that let far too high emissions continue to stagnate, and even misses the government's weak 2030 target with a crash." Kaiser called on the federal government to withdraw its paper and work on a new climate package in time for the COP25 in December, including a faster coal exit and a farewell to petrol and diesel. 

 

Not enough to reach climate targets - German Nature and Biodiversity Conservation Union (NABU)

"The sum of these measures will not be enough to achieve the climate action target we have set ourselves for 2030," said Olaf Tschimpke, president of the German Nature and Biodiversity Conservation Union (NABU). Tschimpke lamented the focus on tax benefits and new subsidies, saying innovations and technology were important for a future worth living, but so were "regulatory measures or tax increases for climate sinners."

 

Major structural changes lacking - WWF Germany

The grand coalition has presented a strategy paper with proposals that will "miss its own climate target of halving the consumption of coal, oil and natural gas by 2030," said Christoph Heinrich of WWF Deutschland. The coalition has already brought the expansion of renewable energy to a standstill and today "decided new hurdles". The coalition must deliver by November 29, before the climate conference in Chile. "We expect laws and budget decisions that will ensure that the 2030 climate target is achieved and make a fair contribution to the Paris Agreement possible".

"The major structural changes are still lacking. We need a CO2 price that is also effective fast, and in the electricity sector a European-regional minimum price of initially 25 euros, which will rise to 40 euros in a few years' time in order to speed up the phasing out of coal," said Heinrich.

 

Christoph Bals, political director, Germanwatch

“That’s not the promised and necessary quantum leap in climate action. Missing the 2030 target is already built into this programme, especially in the transport sector…. The agreed climate act with an annual monitoring of targets for each sector is at least some progress."

“The climate cabinet should improve it until the end of November and pass the climate act.”

 

Sascha Müller-Kraener, executive director, Environmental Action Germany (DUH)

"We call on the regular cabinet not to agree to the proposals presented today in its meeting next Wednesday - everything else resembles a declaration of bankruptcy on climate action. What the climate cabinet has presented today is only hot air and empty promises."

 

Media

Jakob Schlandt, editor in chief, Tagesspiegel Background Energie & Klima (on Twitter)

„There is massive criticsm of the climate compromise – wrongly and rightly. The real measures are largely “pillepalle” (peacemeal). A 10-35 Euro/tonne CO2 price is embarrassing. But the climate architecture is new. Firstly, there is a link with EU targets (finally!). Secondly, the monitoring will become stricter, annual and by sector. Something like saying in 2017 that the 2020 target will still be reached won’t be possible anymore. Thirdly, a CO2 pricing is installed and can be tightened at any time (e.g. by a conservative-green government).

 

Cerstin Gammelin, Süddeutsche Zeitung

No-one should be under the illusion that this marks the start into a low-carbon future. Unlike science, politics was about finding the possible, Merkel described herself the magnitude of the measures. It’s not a pure theory, but what the coalition wants to expose the citizens to. And between the two is a big gap.

At the same time, a big opportunity has been wasted…. The package shows that this is a coalition out of necessity, that does not want to hurt anyone…. It’s a paradox: The package rather hinders a new start. But it extends the coalition's running time.”

 

Gerald Traufetter, Stefan Schultz, Spiegel Online

„The climate package has not become the “pillepalle” (piecemeal), the chancellor had warned against. But it’s also far away from being the big leap, many citizens had expected. ‘Politics is what is possible,’ chancellor Angela Merkel told the press this afternoon. ‘And we sounded out what’s possible.’ Whether that will be enough for the hundreds of thousands of protesters is a totally diffent question altogether.”

 

Jasper von Altenbockum in an editorial for conservative daily Frankfurter Allgemeine Zeitung:

Even though the coalition's climate package shrank to a small cornerstone package on Friday, the coalition could not afford to fail. Tucked between deniers and missionaries, torn between strict and ostensible market economists, it negotiated one of those famous compromises that can only satisfy those willing to compromise […] A policy that gives companies as much freedom as possible, and therefore wants to use only as much state as necessary, is paired with a policy that wants to keep everything under control, and therefore wants to govern with as much state as possible. The mixed form results from a dilemma. Reducing the amount of greenhouse gases is a comparatively simple matter, but to reveal a price for the consumer is risky. If the price is too low, there is a risk of sustained protests by Fridays for Future and election losses to the left; if it is too high, there is a risk of the German 'yellow vests' and election losses to the right […] The fact that environmental associations now call it a 'total failure' is just as exaggerated as the assurance that the transition of the economy and society to climate neutrality can be financed easily in private and public budgets."

 

All texts created by the Clean Energy Wire are available under a “Creative Commons Attribution 4.0 International Licence (CC BY 4.0)” . They can be copied, shared and made publicly accessible by users so long as they give appropriate credit, provide a link to the license, and indicate if changes were made.
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