09 Jan 2020, 13:35
Julian Wettengel

Volume of Germany's climate package climbs to 62 billion euros – MCC

Clean Energy Wire

German Chancellor Angela Merkel’s climate package to reach 2030 targets has a total volume of about 62 billion euros by 2023, making it a “substantial financing package”, writes Brigitte Knopf, secretary general of the Mercator Research Institute on Global Commons and Climate Change (MCC), in a blog post. Initially, the government had announced the climate package would have a volume of about 54 billion euros by 2023, but legislative changes – especially those made in the mediation committee in December – have increased the total. MCC says three quarters of this will be used for climate action measures and tax incentives, while only 25 percent would be given back directly to citizens by reducing the renewables levy and the VAT on train tickets and increasing the commuters’ allowance. This comes as a surprise, as much of the debate in the run up to the decisions had revolved around whether CO₂ pricing could be introduced in a socially just way, writes Knopf. “Even if investments are made in public infrastructure, the direct relief for consumers is not enough, and not everyone benefits from a purchase premium for electric cars, for example,” writes Knopf and calls for improvements to avoid social imbalances.
In a separate background paper, the Stiftung Umweltenergierecht (a foundation for research on energy and environment law) argues that plans to use revenues from the planned national CO₂ price to reduce the renewables levy could lead to a debate about EU state aid rules. The authors lay out different options for the regulatory design of using the revenues, each with different implications regarding state aid.

Faced with climate protests and threats of missing key energy and climate targets,  Merkel’s government coalition presented a comprehensive climate package on 20 September, which is supposed to be implemented over the course of the next years. However, critics quickly said the package is not adequate for reaching Germany's climate targets. In December, the federal parliament thus decided to raise the planned CO₂ price for transport and buildings.

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