Climate protection in transport to cost 75 billion

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Transport Minister Scheuer wants to make the transport sector more climate-friendly with a billion-euro package. Before a high-level meeting of the government on Friday evening, the governing parties will reiterate their positions.

Federal Transport Minister Andreas Scheuer (CSU) wants to advance climate protection in transport with a billion euro package. This is the result of a draft for a paper with which the Ministry of Transport wants to enter the decisive consultations in the Climate Cabinet of the Federal Government. The plans include a massive shift from road traffic to rail, an expansion of local public transport, a switch to alternative propulsion systems for cars and commercial vehicles, and greater use of alternative fuels. According to the ministry, the costs for these measures would total 75 billion euros by 2030.

In the draft, Scheuer’s already known proposals are put into concrete terms. At the end of June, the minister had proposed more than 50 measures to reduce CO2 emissions from traffic. According to reports, however, this is not yet the final paper. On 20 September, the Climate Cabinet will present a strategy to ensure that Germany meets its climate targets by 2030. Above all, the transport sector must deliver.

Specifically, the draft confirms that the funds for the expansion and new construction of rail transport should be doubled to 3 billion euros per year. The planned VAT reduction for long-distance rail tickets should cost around 2.2 billion euros by 2023 and around 6.4 billion euros by 2030.

Half of all city buses are to be electric by 2030 and bicycle expressways on federal roads are to be expanded. According to the draft, the additional required funding for the subsidy of alternative and more environmentally friendly fuel generation plants would amount to up to 12 billion euros by 2030. The buying incentive for electric cars is to be increased – according to the paper, additional funds of 2.6 billion euros would be needed by 2023 and 3.6 billion euros by 2030.

In addition to this, the ministry is apparently considering a buying incentive for electric cars of up to 4000 euros if the car costs less than 30,000 euros. The purchase of used electric cars could also be subsidized with 500 euros and the purchase of electric taxis with up to 8000 euros. Further billions are to be invested in the development of alternative fuels for road and rail transport. The transport sector is under particularly great pressure to reduce its emissions. Unlike all other sectors such as energy, CO2 emissions have not fallen since 1990. In order to achieve the German climate targets for the year 2030, transport emissions must fall from 160 million to 95 million tonnes of carbon dioxide. The package of measures now presented is intended to reduce emissions by between 58 and 69 million.

One week before the decisive meeting of the Climate Cabinet, SPD and CDU/CSU leaders are struggling for compromises in the fight against global warming. At a meeting in the Chancellor’s Office on Friday evening, a central topic will be how exactly the emission of greenhouse gases in traffic and heating should be made more expensive. On 20 September, the Climate Cabinet chaired by Chancellor Angela Merkel (CDU) will present a major package of measures to enable Germany to meet national and international climate targets by 2030. But much remains to be done.

One of the points of contention is how exactly diesel, petrol, heating oil and natural gas should be made more expensive. The CDU/CSU and SPD want to introduce a CO2 price, but have not yet agreed on what it should look like – and how expensive it should be. Both want to balance this added cost by creating financial relief for their citizens in other areas, but have determined differing priorities to this end.

Schulze emphasizes willingness to compromise

The Union is striving to implement a nationwide emissions trading scheme, which must be adhered to by oil companies, for example. Environment Minister Svenja Schulze (SPD) is calling for an increase in energy taxes because this could be implemented more quickly. The economics and climate expert Ottmar Edenhofer, who advises the government, warned against “religious wars”. “A CO2 tax and certificate trading work in the same way when done right,” the economist said. Both set price signals.

On Friday, Schulze stressed her willingness to compromise. She was not “wedded to one single approach”, Schulze said with regard to the controversial CO2 tax in a conversation with Südwestrundfunk radio. According to her, it was important that the pricing is fair and balanced, and that it helped those who have little money. Every overall concept of probably many individual measures would have to be measured against this.

SPD deputy faction leader Matthias Miersch also signalled his willingness to compromise if the emissions certificates – as proposed by the CDU/CSU – are limited by upper and lover price limits. “Regarding the CO2 price we will find a solution if the Union (Union = CDU/CSU) does not insist on a radical market economy instrument in pure form, but is willing to set socially acceptable price limits with us,” he told the Stuttgarter Zeitung and the Stuttgarter Nachrichten. On the other hand, the expansion of green electricity could become a “breaking point”. Renewable energies are to supply 65 percent of the electricity by 2030 – but how to get there is not quite clear yet.

Söder’s “brain teaser”

Among other things, there is a dispute over how to finance these billion-dollar investments and subsidy programmes. Within the SPD, there is some resistance to the CDU/CSU plans to allow citizens to help finance the investment costs via climate bonds at a fixed interest rate of two percent. “The proposal for a subsidized interest yield for wealthy people, financed by the general public, is neither fair nor economically sensible,” said Carsten Schneider, parliamentary director of the SPD parliamentary group. However, the idea of an eco-bond as an investment opportunity for citizens had first been raised by SPD deputy parliamentary group leader Miersch.

CSU leader Markus Söder has advocated financing climate protection expenditures with government bonds. By issuing such bonds with fixed interest rates, the state could send a strong signal, Söder said on Friday in the ZDF-Morgenmagazin. In view of negative interest rates at many banks, this gives citizens the opportunity to participate financially in climate protection. CDU leader Annegret Kramp-Karrenbauer had already advertised the initiative of Söder and Economics Minister Peter Altmaier. Söder emphasized that he rejected the idea of deficit spending in order to finance climate protection financing. “There are a number of good and clever ideas from us, of course from the SPD as well,” Söder said. “There are also clever ideas from beyond the coalition. The problem is not what you can do, but to bring it into a financially viable, sensible concept in the end,” the CSU politician explained. “This is the brain teaser that we are all facing.”

Anton Hofreiter, deputy leader of the Green parliamentary group, called on the coalition to intensify their efforts: “Union and SPD are still a long way from putting on the table an effective, coherent overall proposition”, Hofreiter said. It would not help to just turn a few screws, distribute tax gifts and introduce “possibly dysfunctional CO2 pricing”. “We need a comprehensive turnaround in all sectors of the economy, otherwise the climate targets of the Paris Climate Agreement will be unattainable”.

The chairman of the Young Union (CDU/CSU’s youth organisation), Tilman Kuban, called for a “CO2 traffic light” for foodstuffs to help customers make climate-conscious purchases. “Four percent of imported foodstuffs is accountable for 60 percent of the transport routes,” Kuban told the “Rheinische Post”. “The avocado, which is imported thousands of kilometers from far-away Central America, would receive a different label than the apple from Lower Saxony.”

North Rhine-Westphalia’s Prime Minister Armin Laschet criticised the grand coalition’s climate policy: “The federal government restricts its climate policy to the national framework, talking forever about bans on oil heating, SUVs or cheap flights,” he told the Süddeutsche Zeitung. The national view was “important”, but one should not “neglect climate foreign policy, as the federal government has unfortunately done so far”.

“Great interest” in tax on airline tickets

Federal Finance Minister Olaf Scholz (SPD) has spoken out in favour of joint steps by the European states to limit CO2 emissions. “It is important that everyone knows that we must now take very energetic steps to stop human-made global warming,” he said on Friday at the beginning of an informal meeting of EU finance ministers in Helsinki. There would be discussions about “the different ways of pricing CO2 consumption”.

Scholz said there was “great interest” in the German idea of a climate tax on airline tickets. This could possibly be a model that “can also be used in many other countries. Perhaps this is something that all European countries can undertake together. Likewise, providing tax relief on rail tickets is in line with a European trend”.

The Federal Minister of Finance said that the idea of a CO2 border tax was not on the agenda. The first thing to do was to “find out what everyone else is doing in connection with pricing”. “Actually one increasingly gets the feeling that the European states all want to do something about this together. This is the moment when we have to go and say: we absolutely want to act together and find out whether we can end up with similar action plans after all. That would be a great step forward,” said Scholz.

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