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Abstract

Early in October, the German government introduced its “climate package.” It is a comprehensive bill aimed at reducing the country’s greenhouse gas emissions and enhancing a sustainable energy transformation, especially in sectors that have not succeeded in these tasks so far: Transportation, buildings, and industry. The bill features annual emission budgets for each sector that are in line with the country’s goal of reducing overall emissions to 55-56 percent below 1990 levels by 2030. Among the proposed measures to support these reductions are a carbon price, a tax break for train tickets and building retrofits, and tax credits for commuters. NGOs and think tanks are heavily criticizing the bill for its lack of ambition and the laxity of its instruments. The carbon price has been deemed far too low to be effective, the compliance mechanisms to enforce each sector’s emission budget as well as the external monitoring mechanisms too weak. Overall, experts agree, the bill fails to trigger the large-scale transformation necessary in Germany to ensure Germany’s compliance with its 2030 targets.