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Germany likely to ramp up CO2 price path

16/12/2019 - Germany is likely to introduce a more ambitious carbon price path than previously envisioned by the Federal government. The mediation committee of the two legislative bodies agreed on a starting price of 25 Euro per ton CO2 in 2021, gradually rising to 55 Euros in 2025. Previously, the German government's plan was to start with 10 Euro, rising to 35 Euro. The national pricing scheme is supposed to complement the European Union's Emissions Trading System. The Green Deal plans just announced by Ursula von der Leyen, President of the European Commission, might also comprise more substantial carbon pricing. On this issue Ottmar Edenhofer, Director of the Potsdam Institute for Climate Impact Research (PIK) and of the Mercator Research Institute on Global Commons and Climate Change (MCC):
Germany likely to ramp up CO2 price path

"It is a courageous step for Germany to raise the price on CO2" - says Ottmar Edenhofer, director of PIK. Photo: PIK/Ausserhofer

"It is a courageous step for Germany to raise the price on CO2 - the targeted price path could actually lead to a real reduction of greenhouse gas emissions. It is now close to what economic research has found to be economically effective carbon pricing for the climate package. In light of the weak outcome of the UN Climate Summit in Madrid it is good that Germany shows itself eager to contribute to climate stabilization. Only a substantial carbon price can limit the costs of climate change and secure economic growth in the long term. Social justice is very important here: According to the new plans, the revenues from the pricing will now also be used to reduce levies on electricity. Lowering these charges will benefit all citizens, and especially low-income households."


Weblink to Edenhofer's comment on the European Commission's Green Deal: https://www.pik-potsdam.de/news/in-short/edenhofer-the-european-green-deal-is-a-bold-plan

Weblink to Edenhofer's October assessment of the climate package: https://www.pik-potsdam.de/news/press-releases/pik-and-mcc-deliver-detailed-assessment-of-german-climate-package

Weblink to Edenhofer's CO2 pricing scheme expertise for the Federal Government, delivered in July: https://www.pik-potsdam.de/news/press-releases/pik-and-mcc-contribute-to-climate-policy-special-report-for-german-government?set_language=en

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