Head of German Council of Economic Experts calls for cross-sectoral carbon price

The head of the German Council of Economic Experts (Wirtschaftsweise), Christoph M. Schmidt, says the country must replace its “economically inefficient” support programmes for renewable energy sources with a uniform price on greenhouse gas emissions. In a guest article published by the newspaper Die Welt, Schmidt writes that such a price on CO₂ is “the most reasonable thing from an economic perspective” that is currently being talked about in climate action. The German energy transition’s “construction fault” is that everything is focused on ramping up renewable energy capacity without properly thinking through their costs and integration in the energy system. The support system of Germany’s Renewable Energy Act (EEG) was aimed at reducing emissions, while at the same time bolstering a national renewable energy industry, but it is “inappropriate” for continuing the Energiewende, Schmidt argues, adding that a carbon price in every sector would “end the cacophony of aims” and reduce emissions where it costs the least.

Read the article in German here.

See the CLEW Schmidt interview Time to advance Energiewende by cutting power costs - top economist and the article German environment minister open to national carbon price for background.