German gov't, federal states agree on carbon price

Source: Xinhua| 2019-12-16 23:24:21|Editor: ZX
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BERLIN, Dec. 16 (Xinhua) -- Representatives of Germany's state and federal governments have agreed on a carbon pricing scheme as part of the country's national climate package, local media reported on Monday.

The CO2 price in transport and buildings sectors was to start at 25 euros (27.83 U.S. dollars) per ton from January 2021 onwards, according to German media. Previously, the starting price was set at 10 euros only.

By 2025, the CO2 price in Germany would gradually increase to 55 euros instead of 35 euros per ton, according to a government paper cited by the Deutsche Presse Agentur (dpa). Starting in 2026, emission certificates for carbon would be traded between 55 euros and 65 euros per ton.

"It is a courageous step for the federal and state governments to raise the CO2 price," said Ottmar Edenhofer, director of the Potsdam Institute for Climate Impact Research (PIK) and of Mercator Research Institute on Global Commons and Climate Change (MCC).

The German industry has criticized the higher carbon price in relation to other European countries. "Rising CO2 prices threaten to drastically worsen the competitiveness" of Germany, warned Holger Loesch, deputy director general of the Federation of German Industries (BDI).

According to the dpa, the German government would use the additional revenues from a higher CO2 price to promote green electricity. To that end, the so-called EEG reallocation charge, a levy for the expansion of renewable energy, would be reduced by 5.4 billion euros in 2021.

Since the revenues would also be used to lower the EEG levy, the higher carbon price would "benefit all citizens, and especially households with low incomes," added Edenhofer.

At the end of November, Germany's upper house of parliament (Bundesrat) blocked several key parts of the country's climate package, such as a tax reduction on train tickets, following criticism from the federal states about unfair cost distribution.

The mediation committee, a joint body composed of representatives of the federal parliament (Bundestag) and the legislative body of state governments (Bundesrat), is scheduled to meet again on Wednesday. According to the dpa, the entire package of climate laws could be adopted by the Bundesrat on Friday as planned.