Carbon charges and mobility in the urban environment – What would be the benefits of a climate tax?
Dialogue forum special as part of the "Münchner Klimaherbst" on 22 October 2019
Almost 20% of carbon emissions in Germany are generated by the transport sector. Meanwhile, many cities like Munich are plagued by traffic congestion. Can a charge for carbon emissions remedy the situation? And if so, is a model of this kind socially equitable? Or does it disadvantage particular income groups or German industry? The discussions between the experts at the special dialogue forum were heated at times.
The transport sector poses the biggest headache for climate protection advocates. Despite the fact that engines have become much more efficient in recent decades, we are travelling more and more today, and often in heavier cars. According to the German Federal Environmental Agency (UBA), car traffic alone increased by almost 18% between 1995 and 2017. As Dr. Brigitte Knopf, General Secretary at the Mercator Research Institute on Global Commons and Climate Change (MCC) underlined, countermeasures are urgently needed because time is running out. “If we want to limit the increase in global temperature to between 1.5 and 2 degrees, we must introduce no more than 800 gigatonnes of carbon into the atmosphere.”
Carbon tax has a three-pronged effect
Dr. Jörg Lange, chairman of the association “CO2 Abgabe”, is also convinced that the federal government’s climate package does not go far enough in many instances. “If Germany is to achieve the Paris climate protection targets, it needs to reduce its greenhouse gases by at least 54%, or 466 million tonnes per year, by 2030. With the current measures, we will achieve a third of this reduction at most,” he reckoned.
Politicians need to make compromises
He argued that a carbon charge could prove a useful control instrument, but said it should apply globally and include all sectors. The Bavarian politician feared that going it alone on a national level would lead to competitive and regional handicaps. At the same time, a number of other countries who introduced emissions taxes some time ago are ahead of Germany in this context. Kirchner said that Bavaria had many energy-intensive enterprises, who were being seriously impacted by the climate discussion, and who would also be raising the issue of location. If they relocated their production abroad, carbon emissions might become higher, which would do nothing for the climate. He added that urban and rural areas should not be played off against each other, since each area needed its own solutions. “In the country, people rely more heavily on individual mobility because public transport is limited. So people living there should not be left in the lurch,” he said. Instead of prohibition, Kirchner advocated incentive systems and innovation to drive the necessary changes. “We managed to combat the hole in the ozone layer and remove harmful CFCs from the atmosphere without banning all refrigerators,” he pointed out.
Great potential savings in the energy sector
How expensive could it become if we – and many other countries besides – fail to achieve the targets for 2030? “For me, it is not a question of cost, because we would be jeopardising our very livelihoods,” said Lange. In 2016, the Federal Environmental Agency tried to make the impact of climate damage more tangible, and estimated it was costing €180 for each tonne of carbon emitted. “The costs will increase to several hundred euros per tonne by 2050,” he predicted. “It will be much more expensive than today to get climate damage under control to some degree.” One thing that is certain is that it will prove expensive for German taxpayers, because penalties of up to an estimated €60bn will be payable to the EU if we fail to meet the targets for 2030. “That is why the Government has left the door open for a serious revision of climate change measures from 2026, with the option of introducing binding emission limits,” added MCC General Secretary Knopf. This means we are wasting valuable time.
Companies are further ahead than politicians
The evening’s discussion made clear that climate protection will come at a cost. But it will be even more expensive if we do not rapidly reduce carbon emissions. Politicians, business leaders, and other interest groups will doubtless be discussing the distribution of costs for some time to come. However, one thing is certain: if the climate package the federal government approved in 2019 is not revised, Germany’s climate targets will be at risk.
28 October 2019