Germany debates the creation of a carbon tax

Germany seems to be moving closer to creating a carbon tax. In recent months, the federal government of Chancellor Angela Merkel has debated the introduction of an environmental tax that will lead to a drastic reduction of highly polluting fossil fuels such as coal, oil and gas.

Despite the fact that the lack of ambitious measures to alleviate climate change generates an emergency situation in the country, the executive remains divided on this issue. For months the Minister of the Environment, the Social Democrat Svenja Schulze, has pushed for this tax to be applied to carbon dioxide (CO2), something opposed by her conservative partners, who choose to reform the European emissions trading system, and which the Ministry of Economy views with skepticism.

However, the move appears to have Merkel’s approval. To reduce pollution “the most effective way is to set a CO2 tax,” the chancellor said in her last press conference before going on vacation. Faced with the slowness of the European Union, Berlin will opt for action at national level. Determining the price of that tax, they say, will be a “harder” question to answer.

On the other hand, the Foreign Ministry also proposes to make certificates more expensive to be able to emit polluting gases and expand them to the energy, transport and construction sectors so that this reduction has a greater impact. The minister wants this carbon tax to have an impact on the price of flights.

In 2007, Merkel’s first government set itself very ambitious targets to cut polluting emissions from Europe’s economic locomotive and boost sustainable energy. More than a decade later, Germany sees its lack of action making it impossible for it to meet the 2020 climate targets. The CO2 reduction had to be 40% and is currently 32%.

To try to reverse that situation, Berlin is trying to buy time with another package of measures that it will present in September and that sets new objectives for 2030. The climate protection law they intend to pass before the end of the year will include a boost to clean energy, reduce their dependence on coal – it is the world’s main consumer of lignite – and perhaps a climate tax. All this with the intention of reducing emissions by 55% compared to 1990.

Climate taxation

Environmental taxation is a tool already used in other countries such as Canada, which in October last year established a carbon tax to make the use of fossil fuels more expensive and penalized. The measure approved by Ottawa is added to the cost of fuel, passing on to the consumer, although later the government guarantees a return to families as an “incentive for climate action”.

Spain has the lowest tax burden in Europe in this type of tax, which stands at 1.6%, while in Denmark it is 3.9% of the total. In neighboring France, the carbon tax exploded the ‘yellow vest’ protest movement. In Germany, it seems that a consensus is beginning to be built to implement it.

Source: The Newspaper