Economists in Germany Want More Climate Action – But How?
In the ifo Economists Panel, a joint undertaking with FAZ, German economists have stated they want to see more climate action on the part of the EU. According to the latest survey, 41 percent of respondents believe that the EU should do more to protect the climate. Meanwhile, 27 percent consider EU policy to be appropriate, while only 20 percent claim that the bloc should do less. The survey involved 171 university professors.
“The results make it clear: the German government must respond to the EU’s new climate policy. When the new EU Emissions Trading System comes into force, the national carbon price should be abolished or at least fundamentally reformed,” says Karen Pittel, Director of the ifo Center for Energy, Climate, and Resources.
Economists disagree on the shape that future climate policy should take: 68 percent call for the existing EU Emissions Trading System to be expanded to cover heating and transport. Only 17 percent approve of the EU’s current plans to first establish a parallel system at the European level for emissions from heating and transport. 45 percent of respondents are against the EU’s plans to retain national reduction targets for all emissions that were not covered by the original EU Emissions Trading System. The same applies to heating and transport. Of those surveyed, 41 percent are in favor, while 49 percent reject the EU’s plans to simultaneously integrate road transport into emissions trading and tighten fleet standards. However, 39 percent of the professors surveyed think that this is the right move.
Germany’s Climate Change Act, passed in June, sets precise carbon reduction targets in each sector. Here, 60 percent of the professors are against it; 30 percent are in favor. Pittel, too, takes a critical stance on the matter: “The German government revised the Climate Change Act without waiting for the EU’s new climate and energy package. The sector-specific targets in particular make little sense if a second EU Emissions Trading System is introduced.”
Of the survey respondents, 54 percent want to see the national carbon price abolished if carbon prices are introduced at the European level. A total of 21 percent want to retain the national carbon price on the condition that it is nettable and is increased to achieve more ambitious national climate targets. Meanwhile, 17 percent would like to retain the national carbon price and to net carbon prices at the European level. The national carbon price currently stands at EUR 25 per metric ton for heating oil, diesel, and gasoline and will rise to EUR 55 by 2025.
The economists are for the most part unanimous in their rejection of extending the European Central Bank’s mandate to include the EU’s goal of achieving climate neutrality by 2050. 80 percent are against it; only 14 percent are in favor. And 70 percent think that the ECB should not increase its purchases of bonds from low-emission companies to support the EU’s climate policy goals. Only 23 percent support the move.
