We Need the National Carbon Tax

At the EU summit in June there was again disagreement on when the continent should become carbon-neutral. Climate protection became just a footnote in the summit declaration. Even at the G20 summit in Osaka that took place shortly afterwards, the leading economic powers did not make any progress on climate protection. A political consensus at the international level therefore remains a long time coming, in spite of the great urgency for effective climate protection. We should therefore now assume more national responsibility and quickly introduce a carbon tax. Other countries such as Great Britain, Sweden and Switzerland have long since done so.

Of course, a functioning global emissions trading system for all relevant sectors with appropriate carbon pricing would be the most effective method of climate protection. However, it will be a long time before this happens — time that we do not have in view of the rapid progress of climate change. That is why I very much welcome the current debate on a national carbon tax in Germany. Such a tax could be implemented quickly and would already be contributing reducing greenhouse gases by the time international measures are introduced. This was clarified by the Council of Experts of the German Federal Government in its special report. All the more regrettable, therefore, that the Climate Cabinet again only discussed without result last night instead of taking a decision.

Infrastructure measures instead of repayment

However, I do not believe that the current planned redistribution of income is the right way forward if the tax is to have a steering effect. Of course, people on low incomes should not be overburdened. Therefore, supporting measures must be utilized here. This is what the income from the carbon tax should ultimately be used for. These include infrastructure measures for climate-friendly mobility, such as the development of cycle paths and public transport, as well as stronger financial incentives for the renovation of buildings or the purchase of electric bicycles. This would allow many people to help protect the climate while saving money, without losing any comfort. At the same time, the infrastructure measures would support the economy.

It is also important that the tax covers all sources of pollution as well as all greenhouse gases. It must therefore be applied to air traffic, for example, and the calculation must be based on CO₂ equivalents, including carbon monoxide, methane and nitrogen oxides. The consequential costs of greenhouse gases must be appropriately priced with the tax.

We must also continue to make progress internationally

A tax such as this could improve Germany’s climate footprint in the short term and show that climate protection is really important to us. However, we should also continue to push ahead with international agreements. There are positive signs at the moment, at least on a European level. The new EU Commission President Ursula von der Leyen promises an ambitious climate protection policy with the goal of making Europe the first climate-neutral continent by 2050. Now is the time to turn words into actions.

Here SMA CEO Jürgen Reinert writes about topics that move him.