The German government is exploring the introduction of a carbon price to get the country back on track to reach its ambitious targets for emission cuts.
In a turning point in the government’s approach to CO2 reduction, Chancellor Angela Merkel told parliament her new ‘climate cabinet’ would incorporate latest proposals and research on carbon pricing in the transport and heating sectors when drafting legislation to achieve Germany’s 2030 climate targets.
Clean Energy Wire reports prominent members of Chancellor Merkel’s CDU party had previously insisted that a carbon price was not on the government’s agenda.
Chancellor Merkel has put carbon pricing on the government’s agenda as a possible measure to reduce greenhouse gas emissions enough to meet 2030 climate targets.
The government’s new ‘climate cabinet’, a group of ministers with key responsibilities on climate issues, would look at recent expert opinions on carbon pricing schemes, Chancellor Merkel said in a question and answers session in parliament.
“With a wealth of research and advice available on carbon pricing, it would be “ignorant if we did not include the latest reports in our considerations”, Chancellor Merkel said.
Economist Professor Andreas Löschel, who has just been re-appointed to head the government’s independent expert commission tasked with monitoring the energy transition’s progress, welcomed the government’s change of course.
“This is very good news for the further progress of Germany’s energy transition,” said Professor Löschel, from the University of Münster.
A carbon price would give incentives to switch to low-carbon technologies in all sectors.
It would make renewable electricity cheaper compared to conventional energy sources, and therefore boost its use in different sectors, such as heating or transport, a process often referred to as sector coupling.
“There is a common understanding among researchers and politicians that carbon pricing is the next important step,” Professor Löschel told Clean Energy Wire.
The Chancellor’s words mark a turning point in the government’s attitude towards carbon pricing in the non-ETS sectors.
Chancellor Merkel’s close ally, energy minister Peter Altmaier, has repeatedly refused to consider the introduction of a carbon price because it was not mentioned in the coalition agreement for the current legislative period.
Early suggestions to look into carbon pricing by environment minister Svenja Schulze had been rebuked by Mr Altmaier and other members of the coalition, often citing the French yellow vest protests as a warning as to why such a scheme would not be feasible.
Germany’s government is under pressure to complete a package of measures and legislation that will ensure greenhouse gas reductions of 55 per cent by 2030, so as to avoid target failure and costly payments for emission allocations under the European Union’s effort sharing regulation.
Chancellor Merkel stressed there were several options to cut emissions.
Opinions on whether such a price should be implemented as a tax or a cap-and-trade system, whether there should be a universal price or sector-specific pricing vary widely between experts and parties.
