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Three options on how the money could be used from the CO2 revenue

BerlinThe basic idea is simple: CO2 is to receive a price so that less harmful greenhouse gases are emitted in the future. Steering effect through behavior change. If the fuel is more expensive, so the assumption, then buy more people low-consumption cars or use their bike or bus and train instead of the car.

The same applies to heating oil: if this becomes more expensive, then people should be more willing to replace their old heating system with a more modern, low-consumption heating.

By pricing CO2, be it through emissions trading or through taxation, the state would generate billions in revenue, even if oil, coal and gas consumption were to fall. For months, politicians have been discussing what a socially acceptable pricing might look like in order to take people along this path.

The German Federal Council of Economic Experts, which recommended to the coalition on Friday to introduce a CO2 price, also advises that the additional revenue be returned to the citizens "socially balanced". The following options are discussed:

1. Direct re-distribution of revenue through a lump-sum payment to each citizen

This is already practiced in Switzerland. Every citizen receives a capitation regardless of age. Variations are conceivable: If the household size were taken into account, for example, single people could be more relieved.

If the lump sum for children was lower than for adults, the funds freed up could be used to raise the lump sum for adults. In addition, individual cases of hardship could be taken into account. For example, low-income households could receive targeted transfers.

The idea of ​​a mobility allowance could relieve commuters.

2. Reduction of excise taxes

In international comparison, for example, the taxes on electricity consumption are relatively high. It would be possible to reduce the electricity tax to the European minimum level. In addition, it would be conceivable to finance a large part of the EEG surcharge, which is currently being added to the price of electricity, from the additional revenue from a CO2 price.

Another option would be to reduce the reduced VAT rate to the European minimum rate. According to calculations, the revenues from a CO2 price of 35 euros per tonne of CO2 are enough to completely reduce the electricity tax and EEG levy, as well as the reduced VAT rate to 6.4 percent.

3. Extension of transfers as complementary measures

For example, it would be possible to waive an environmental fee with transfer payments such as social assistance. The housing allowance could also be extended to relieve low income earners in particular.

But there are also ideas beyond the options presented by the Council of Experts. Last week, Federal Environment Minister Svenja Schulze (SPD) had already presented three reports, which the Climate Cabinet is to discuss next week, in order to prepare the basis for a decision by the Federal Government.

These reports, prepared by the German Institute for Economic Research (DIW), the Institute for Macroeconomics and Business Cycle Research of the Hans Böckler Foundation (IMK) and the Forum for the Ecological Social Market Economy (FÖS), also consider the payment of a so-called climate premium Small and medium-sized households could benefit disproportionately. Proportionally, the revenue could also be used for a reduction in electricity costs, it said.

The range of a possible repayment varies in all the different models between 80 to 140 euros. Of course, in the end, it depends on individual energy consumption to what extent the additional costs caused by a CO2 price are actually compensated. Frequent driver and commuter households tend to be more heavily burdened, as are households in large, poorly insulated homes.

However, since low-income households generally consume less energy because they drive smaller cars and live in smaller apartments, they are more likely to get more back payback than paying more at the gas station or for heating, he argues DIW.

The Federal Government has been arguing for months about the future course of its climate policy. On Thursday, the Climate Cabinet will advise the government on the introduction of a carbon price. But decisions should only be made in September. Anyway, there are enough ideas.

More: The economic methods advise the federal government to introduce a CO2 price. The implementation, however, involves risks. Read more in the commentary by Klaus Stratmann.

. (TagsToTranslate) CO2 price (t) CO2 pricing (t) CO2 (t) Air Cabinet (t) environmental impact Climate Change (t) Emissions trading (t) Environmental protection (t) environmental tax (t) environmental management (t) environmental policy (t) Tax (t) Council of Economic Experts (t) DIW (t) Hans Böckler Foundation (t) IMK (t) SPD

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