Advocates urge for decreased electricity rates for consumers
In an effort to combat climate change, Germany is set to implement a gradual increase in the CO2 price on gasoline, diesel, heating oil, and natural gas, starting from 2021. This move aims to make fossil fuels less attractive and encourage a switch to more climate-friendly alternatives. However, the price increase particularly affects commuters and the flexibility of consumers.
To alleviate the financial burden on households, the German government has proposed several key strategies for returning the revenues from the CO2 pricing. One such strategy is the creation of a climate bonus, a direct financial support paid to citizens to compensate for the increased costs.
Another strategy involves the reduction of electricity prices. Klaus Müller, CEO of the Federation of German Consumer Organizations (VZBV), has proposed a direct reduction in electricity prices as a means to provide relief to consumers. Revenues from CO2 pricing are also proposed to finance reductions in electricity taxes and surcharges, with the recent coalition agreement foreseeing a reduction of five cents per kilowatt hour. This reduction could save a private household around 175 euros per year, according to calculations by the consumer protectors.
Müller, along with climate economists, has also advocated for refunding CO2 pricing to consumers through an annual "climate check." This approach, known as "climate dividend," would return part of the CO2 pricing revenue back to consumers in the form of a rebate.
Germany has also extended electricity price compensations to offset increased costs for industries and households under the EU Emissions Trading Scheme. The focus is on protecting vulnerable groups, with funds being channelled into Social Climate Funds to assist vulnerable and low-income households, enabling investments in energy efficiency and supporting their energy needs.
In conclusion, Germany’s approach to returning revenues from the CO2 pricing on fuel and heating centers on a climate bonus payment to citizens, lowering electricity taxes and surcharges to reduce bills, and targeted compensation measures to protect vulnerable groups and industries during the energy transition. These strategies aim to make the transition to a more sustainable future as socially and economically equitable as possible.
- The German government is considering a direct reduction in electricity prices as a means to provide relief to consumers, with revenues from the CO2 pricing being proposed to finance this reduction.
- Klaus Müller, CEO of the Federation of German Consumer Organizations (VZBV), has also advocated for refunding CO2 pricing to consumers through an annual "climate check," a method known as "climate dividend."
- To offset increased costs for industries and households under the EU Emissions Trading Scheme, Germany has extended electricity price compensations. These funds are aimed at vulnerable and low-income households, enabling investments in energy efficiency and supporting their energy needs.
- In an effort to make the transition to a more sustainable future as socially and economically equitable as possible, Germany’s approach to returning revenues from the CO2 pricing on fuel and heating centers on a climate bonus payment to citizens, lowering electricity taxes and surcharges to reduce bills, and targeted compensation measures to protect vulnerable groups and industries.
