Media reports German government warming towards carbon tax

The Frankfurter Allgemeine newspaper has reported Germany looks set to introduce an economy-wide system of carbon emissions pricing after senior officials from both parties in the country’s governing coalition reached a consensus on the proposal.

According to the newspaper, Economy Minister Peter Altmaier, a conservative, had come round to the idea after initially opposing the proposal by Social Democrat Environment Minister Svenja Schulze.

“It looks like a form of carbon pricing is going to come,” the newspaper quoted an Economy Ministry official as saying.

Reuters Newsagency reports earlier this month, Chancellor Angela Merkel had announced that the government would examine proposals for a system of carbon pricing, which would make more expensive activities that contribute to climate change by releasing carbon dioxide.

The proposal would make electricity generated from renewable sources such as wind and solar cheaper compared to the coal-fired power that Germany plans to phase out over the next three decades.

Reuters reports under the proposal backed by both ministries, the increased costs to consumers and businesses would be compensated by tax cuts elsewhere so the net tax burden would not increase.

An increasingly restive public is raising the pressure on governments around the world to act more decisively to slow emissions amid evidence that catastrophic climate change is becoming an ever more real prospect.

However, many businesses fear the costs of climate protection legislation could be crippling.

The proposal would extend carbon pricing in Germany to areas such as transport and construction that are not covered by a European Union-wide system of tradeable carbon emissions.

The paper said officials aimed to introduce a certificate-based scheme, rather than one that relied on a formal carbon tax.