Germany Unveils $60 Billion Climate Package
BERLIN — Chancellor Angela Merkel’s government on Friday agreed to support a $60 billion package of climate policies aimed at getting Germany back on track to meet its goal of reducing greenhouse gas emissions by 2030.
Opposition politicians and experts on climate science quickly condemned the package as lacking the ambition needed to restore the country’s status as an international leader in efforts to battle climate change.
Once a front-runner in climate action and a champion of an energy-transformation project aimed at weaning its energy sector from depending on fossil fuels, Germany has scaled back its ambitions in recent years. The government has said it will fail to reach its 2020 target to reduce emissions by 40 percent of 1990s levels.
The proposed measures — which include a scheme to charge industrial polluters for carbon emissions and a raft of incentives — had been discussed for weeks, and Ms. Merkel’s conservatives and their junior partners, the center-left Social Democrats, took more than 18 hours to reach the agreement.
As the leaders deliberated, tens of thousands of schoolchildren and their parents packed the streets of Berlin, the capital, and more than 500 cities across the country as part of global climate protests. The German demonstrators demanded that Ms. Merkel, who early in her tenure was known as the “climate chancellor,” take more concrete, ambitious action to reduce the country’s climate footprint.
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Under the terms of the new package, Germany will work to reduce carbon emissions by 55 percent of 1990 levels by 2030.
A cornerstone of the agreement is to begin charging in 2021 for carbon emissions that are generated by transportation and heating fuels.
Companies in the transportation industry will be required to buy certificates for 10 euros (about $11) per ton of carbon dioxide emitted. The price will increase to 35 euros per ton by 2025, and a free-market exchange will open afterward, allowing the polluters to auction their carbon pollution permits. Consumers will likely face higher gas prices that the government will offset by raising tax breaks for commuters.
Another measure is establishing a panel that will regularly review the government’s progress toward reaching its climate goals, to adjust the plan along the way and keep the country on track.
“I understand those who ask why should we believe you that you will achieve this,” Ms. Merkel told reporters. “The chances are very good, they have grown, that we will reach our climate goals this time,” she said, adding that the panel would help.
Other measures include subsidies for electric cars and energy efficient heaters, with a ban on oil-burning furnaces starting in 2025. Taxes on flight tickets will be increased, while surcharges for train tickets will fall as part of efforts to encourage more people to switch to the rails from the air. Renewable energy sources, including wind and solar, will be expanded in an effort to increase their share to 65 percent of all energy by 2020.
The measures are to be financed through tax levies and from Germany’s climate fund. Those sources will provide more than 54 billion euros, or $60 billion, in financing through 2023, averting loans and budget deficits, said Olaf Scholz, the finance minister.
Critics said the package did not go far enough. “The whole package lacks courage,” said Ottmar Edenhofer, the director and chief economist of the Potsdam Institute for Climate Impact Research. “The commitment into the future is missing.”
“The German government has failed to protect the climate,” the opposition Greens, who have enjoyed a surge in popularity recently said in response to the announcement.
Climate experts had called for a carbon price of at least 50 euros in order to force industry to turn away from fossil fuels and to encourage innovation. Ms. Merkel conceded that the lower price had been a compromise, but insisted that combined with the incentives, it would be sufficient to help Germany reach its 2030 goal.
“The price alone would not be enough,” the chancellor said. But coupled with the package of incentives, they can help ensure that the fight against climate change remains affordable and acceptable for everyone in society, she said.
The agreement will be put to a vote in Parliament before year’s end, where it is expected to pass. While the measures may help stem the ecologically minded Greens party’s surge in popularity in recent months, they may increase pressure on the country’s industrial base at a time when there are signs that the economy could be on the brink of recession.
Germans largely agree on the science showing that humans are responsible for the increased temperatures undergirding global warming, and a recent survey showed that 63 percent believed that measures to protect the climate should be introduced, even if it comes at a price to the country’s economic output.
Record heat and droughts over the past two summers, along with increasingly severe storms, have brought home the immediate effect that climate change can have on ordinary Germans, as well as farmers and foresters. Only supporters of the far-right Alternative for Germany party have denounced the measures as “Climate Craziness” aimed at destroying the country’s standard of living.
Ms. Merkel is headed to New York to take part in the United Nations climate change summit meeting, where she will give a speech on Monday.
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