A Master Plan for Climate Policy

Climate policy is playing an important role in the coalition negotiations in Germany. However, it needs to be considered in European and ultimately global terms. Europe can play a leading role in technologies for CO₂ reduction and adaptation to global warming. The carbon price is the central instrument of this policy. The ETS system should include all sectors. Revenue from the carbon price must be returned to households and businesses to ensure social equity and maintain the competitiveness of European industry. This must be accompanied by public and private investment. Financing should come from the existing European reconstruction fund, NextGenerationEU. Moreover, the European debt rules should provide scope without casting the soundness of public finances into doubt.