Germany pens package that includes carbon plan plus electric car support

It has been a sleepless night in Berlin for Angela Merkel and senior leaders of Germany’s government coalition, as they struggle to put the finishing touches to a keenly awaited package of climate measures for Europe’s largest economy, writes Tobias Buck in Berlin.

The meeting started on Thursday evening and continued through to Friday morning, with results expected to be presented at a press briefing at 2.30pm local time.

“The negotiations are on the final lap,” Andreas Jung, a member of parliament for Ms Merkel’s Christian Democratic Union, told German television early on Friday.

At the heart of the climate package is a plan to reduce greenhouse gas emissions by imposing a price on carbon. Though details have yet to be confirmed, the government is expected to introduce a national emissions trading system that would apply to emissions coming from the transport sector and from buildings. Neither is currently covered by the Europe-wide emissions trading regime, which applies to heavy industry and the energy sector.

In practice, this would mean that companies selling petrol, gas and heating oil would have to buy certificates to cover the emissions from their products – with the government expected to set both a minimum and a maximum price.

The package is also expected to include support for electric vehicles, financial incentives for owners ready to make their homes more climate friendly and more funds for the German rail service. The government will try to accelerate the expansion of renewable energy sources such as wind and solar power, which are supposed to account for 65 per cent of German electricity generation by 2030.

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Ms Merkel and her government have been under intense political pressure to step up their efforts in the fight against climate change in recent years, amid growing evidence that German voters see the issue as pivotal.

A poll released by the ARD television channel on Friday showed that 63 per cent of German voters said they saw climate change policy as a greater political priority than economic growth. That sentiment has also been reflected in the recent electoral success of Germany’s Greens party, which is polling at more than 20 per cent and has gradually eclipsed the Social Democrats as the leading party of the German left.

Via Financial Times