Climate laws blocked by Bundesrat in bid to renegotiate deal

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Parts of the climate package must be renegotiated in the Conciliation Committee of Bundestag and Bundesrat. Among other things, the Upper House (Bundesrat) stopped the changes to the commuter allowance and cheaper train tickets for long-distance traffic. The CO2 price, however, has gotten a go-ahead.

For the time being, the Upper Chamber has stopped several tax changes planned in the climate package – including an increase in the commuter allowance, tax incentives for building renovation, and tax reductions for long-distance train tickets. The Bundesrat unanimously decided to refer the matter to the Mediation Committee, in which the Bundestag and Bundesrat now have to look for compromises.

The main soure of conflict is the distribution of costs between the federal government and the states. There was also criticism of other parts of the climate package, but no agreement could be reached to mandate the Conciliation Committee.

CO2 price and higher taxes on plane tickets passed

As parts of the climate deal do not require the approval of the federal states, the way has been cleared for them. This includes the climate protection law with fixed targets for saving greenhouse gases in individual areas such as transport or agriculture, as well as the CO2 price in transport and heating, which is to make fossil fuels more expensive. Last but not least, the higher taxes on plane tickets can also move ahead.

Before Christmas, the federal government wants to find a compromise for the regulations that have been stopped for the time being. Some state representatives consider this to be very ambitious or unlikely. In particular – but not only – the Greens want to renegotiate on the climate protection measures themselves, while others are more concerned with financial issues; they see the states and municipalities as being at a disadvantage compared to the federal government.

Fix fundamental flaws or just clarify financial issues?

For Bavaria, CSU leader Markus Söder said the Bundesrat should be constructive and clarify financial issues, but not block the package in principle. Baden-Württemberg, on the other hand, had requested before the meeting to negotiate the entire package in the mediation committee. The CO2 price, which is to increase the price of fuel and heating oil, has “design flaws”, said Baden-Württemberg’s Prime minister Winfried Kretschmann (Greens). According to Kretschmann, the starting price was too low to have a relevant steering effect, and there would also be constitutional doubts. In the direction of Söder, he said that the mediation committee was an instrument to dissolve blockades.

The Prime Minister of Schleswig-Holstein, Daniel Günther, said that nobody wanted to prevent fair railway prices – but that there was still an open question regarding costs and revenues. Like Kretschmann, the CDU politician also criticized the CO2 starting price as “simply too low”, as it would not have any steering effect – and advocated to renegotiate more than just tax questions.

Party colleague Armin Laschet defended the planned CO2 price as a big step towards properly trading pollution rights. “This climate package is welcomed everywhere outside Germany,” said North Rhine-Westphalia’s Prime Minister. According to him, it was good, however, that the Upper House (Bundesrat) had called the mediation committee on tax law questions.

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