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Germany plans price hike for CO2 emissions

December 16, 2019

Global warming-causing carbon emissions are reportedly set to more than double in price. It's a step in the right direction, say some climate activists, but others say the compromise still falls short of demands.

Gases stream out of a coal power station in Germany
Image: picture-alliance/Construction Photography/plus49

Germany is planning to more than double its original pricing scheme for carbon dioxide emissions, government sources said Monday — one day after the dead-end outcome of conversations in Madrid between global climate negotiators about how to implement the ambitious Paris climate agreement of 2015. 

The last-minute adjustment clears the way for German lawmakers to pass their hotly debated $60-billion (€54 billion) climate package, aimed at significantly reducing emissions levels, as early as Friday.

'A step forward'

The new revisions to the climate package deem that one metric ton of carbon dioxide (1.1 short tons or 2,205 pounds) will cost €25 ($28) beginning in 2021, up from an original price tag of €10, German media reported. That price will then climb to €55 per ton by 2025, instead of the previous benchmark of €35.

Carbon-dioxide pricing was a key point in the massive dossier of climate protection legislation adopted by Chancellor Angela Merkel's government in September. But climate activists and researchers alike contended that the low price wasn't ambitious enough to effectively curb industrial emissions, prompting the upper house of the German Parliament, the Bundesrat, to renegotiate pieces of the legislative package.

Germany's climate package

The Bundesrat is comprised of representatives of Germany's powerful state governments and at present, 10 out of the 16 government representations include the environmentalist Green Party. According to party co-leader Robert Habeck, the Greens led negotiations on tailoring the new emissions pricing scheme.

"The government didn't deliver this compromise. Rather, it came about through persistence, through The Greens' clever and tough negations against the government," he told reporters on Monday. "We're half satisfied, half unsatisfied. But it's a step forward — the prices are significantly increasing."

Lawmakers also hammered out other points of contention in the bill, including further price reductions for train tickets and tax write-offs for rural commuters bound to face steeper gasoline prices in the future.

Germany alone not enough

The higher carbon prices were welcomed by climate scientists who have long pushed for aggressively pricing carbon emissions. "It's foreseeable that the envisioned price trajectory could actually reduce greenhouse gas emissions," Ottmar Edenhofer, director of Germany's Potsdam Institute for Climate Impact Research (PIK), told reporters on Monday as news began to circulate of the government's plans.

"Given the poor result at the [UN] global climate summit in Madrid, it's good that Germany wants to make its contribution to climate stabilization," he added.

The compromise, however, isn't enough to satisfy all the demands of climate activists, who had hoped other world powers would also announce bolder approaches to curb greenhouse gas emissions at the conclusion of the UN climate summit in Madrid on Sunday.

After more than 36 hours of overtime sessions, the 200 participating countries acknowledged a "significant gap" between existing pledges and the temperature goals codified in the 2015 Paris climate agreement. The accord calls on countries to prevent global temperatures increases from reaching 2 degrees Celsius (3.6 degrees Fahrenheit) above preindustrial levels.

Read more: Opinion: COP25 fails to keep pace with the people

Germany is showing that it can at least respond to critique, said Martin Kaiser, a climate expert with Greenpeace Germany. But "in order to quickly reduce CO2 emissions, we need a scientifically geared CO2 price of at least 80 euros," he said.

Germany also can't resuscitate the Paris Agreement on its own, Sabine Minninger, climate expert with Bread for the World, a German aid agency, told DW. Countries like the United States, Brazil and Australia, which have played "a very destructive role" in climate protection, also need to step up to the plate.

"The spirit of Paris is still alive, but it's heartbeat is weak," she said.

Merkel: 'We hoped for more progress'

Chancellor Merkel also expressed disappointment in the outcome of the climate summit in Madrid, saying through her official spokesman that, "We had also hoped for more progress."

The chancellor refused to comment on the reported compromise on higher carbon emission prices before the government gives its sign-off on Wednesday. After that pro-forma step, the lower parliamentary chamber, the Bundestag, is expected to vote on tax measures related to the compromise before the Bundesrat then casts its votes on Friday, providing the last stage of parliamentary approval for the outstanding portions of the climate package.

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Jens Thurau Jens Thurau is a senior political correspondent covering Germany's environment and climate policies.@JensThurau