ifo Institute: Climate Policy Remains Fragmented, with Few Mandatory Climate Goals
While the ifo Institute regards it as an important signal that the draft of a climate protection law has been passed by the German cabinet, at the same time ifo wishes to draw attention to a number of significant shortcomings. “Abandoning mandatory, long-term climate goals for 2050 is extremely problematic,” explains Karen Pittel, Director of the ifo Center for Energy, Climate, and Resources.
As a matter of principle, Pittel cautions against relying excessively on the effectiveness of climate protection legislation. There is no guarantee that legislation will not be amended by subsequent governments, as in the recent case of the Atomic Energy Act. And the higher the costs involved, the more likely this scenario becomes.
For precisely this reason, she advocates setting more flexible goals for individual sectors. For example, if the road transport goal is to be reached at all by 2030, then only by incurring disproportionately high costs. “In the long run, however, all sectors must play their part in meeting emissions targets. While flexible sector goals are advisable from an economic point of view, it would be disastrous if setting them led to the postponement of investments that are essential over the long term,” Pittel says.
In her opinion, the risk of such a delay is exacerbated by dispensing with mandatory climate goals for 2050. Even with a reference to the binding nature of UN and EU goals, the rather vague pledge to lay down “‘Emissions sinking annually after 2030 by statutory order’ (para 4) and to pursue ‘Greenhouse gas neutrality as a long-term goal for 2050’” (para 1) is an inadequate substitute.
“As regards the Climate Protection Program 2030, it is unfortunate that, to a large extent, the catalogue of measures that was presented in detail today still lacks a systemic perspective,” Pittel says. A further reform of the energy tax and levy system is still not in sight. An initial comparison of the 173-page document with the climate package published on September 20 shows few substantial changes. Although the greater emphasis on energy efficiency is a positive development, the actual implementation remains unclear.
In particular, Pittel stresses that the current Climate Protection Program should have offered greater incentives for technology development and infrastructure measures, as investment decisions are made well in advance. “Otherwise, there is a danger that the climate goals can be achieved only at exorbitantly high costs,” Pittel says, before adding, “Unfortunately, it is already evident that the adopted measures will not be sufficient to send out the right signals. Above all, it is imperative that carbon pricing be increased to steer purchase and investment decisions towards low-emission technologies.”
