Environmentally harmful subsidies: there will be losers

A debate about environmentally harmful subsidies is important, but it also needs to be conducted honestly, says Hans-Joachim Vieweger. Business and consumers must be given the chance to adjust to the changes.

It sounds tempting: harmful subsidies are being dismantled, the state can spend billions elsewhere, and the whole thing should also be socially acceptable. At first glance, the dismantling of environmentally harmful subsidies only seems to have winners. But under the melodious headline there are highly problematic details.

Land consumption and rising rents

Have you really seriously considered going one step further at a time when gasoline and energy prices are already rising? After all, abolishing the tax relief for diesel means nothing more than that the price at the petrol pumps will continue to rise. An increase in VAT on meat and other animal products would also lead to rising prices. And that while inflation is moving towards five percent. The requirement is also problematic in terms of the tax system: In the already complicated German tax system, a distinction would have to be made between plant-based and animal-based foods in the future.

Yes, some subsidies may have negative environmental effects. But do you really want to cut funding for new residential construction – at a time when housing costs are one of the most pressing issues? There are conflicting goals in politics. As important as it is to pay attention to space consumption, the rise in rents moves many people. And of course you can cut privileges for air travel, but if this only applies to domestic airlines, little is gained for the environment.

Subsidies are complicated

In order not to be misunderstood: A debate about environmentally harmful subsidies is important – preferably a debate about the whole subsidy system, which is actually extremely complicated and has many harmful effects. Both for the climate and for the economy. But such a debate must be conducted honestly. First of all, this includes saying that there will be losers from such a reduction in subsidies.

Second, this includes setting a reasonable schedule for dismantling. Business and consumers must be able to adjust to changes. And thirdly, that includes not having the hoped-for billions for breakfast straight away, because they will not be available anytime soon. The hopes that some associate with the dismantling of environmentally harmful subsidies could otherwise quickly turn out to be a no-brainer.