Author : Mr. Simon Black
Publisher : International Monetary Fund
ISBN 13 : 1513594958
Total Pages : 36 pages
Book Rating : 4.5/5 (135 download)
Book Synopsis Scaling Up Climate Mitigation Policy in Germany by : Mr. Simon Black
Download or read book Scaling Up Climate Mitigation Policy in Germany written by Mr. Simon Black and published by International Monetary Fund. This book was released on 2021-09-27 with total page 36 pages. Available in PDF, EPUB and Kindle. Book excerpt: Germany has set national greenhouse emissions targets of a 65 percent reduction below 1990 levels by 2030 and net zero emissions by 2045, along with various sectoral emissions goals. To achieve these targets, the government has introduced multi-pronged policy measures, including a national emissions trading system (ETS), which complements the ETS at the EU level. This paper shows the substantial variation in the price responsiveness of emissions across sectors and thus prices implied by sectoral targets. It proposes the following measures to help Germany meet emissions targets with greater certainty and cost effectiveness: (i) further strengthening carbon pricing, for example through automatically rising price floors for the national ETS after 2026; (ii) harmonizing carbon pricing to reduce cross-sector differences in marginal abatement costs; and (iii) introducing feebates (revenue neutral taxsubsidy schemes) to reinforce incentives at the sectoral level. The paper also studies the distributional impact of higher carbon pricing and suggests that reducing social security contributions can mitigate the regressive direct impact of higher carbon pricing on lowerincome households. Concerns with carbon leakages and firms’ competitiveness are best addressed through agreeing on an international carbon price floor.