The increased CO2 price has made refueling and heating more expensive. FDP Finance Minister Lindner rejected calls for compensation for citizens. There should be no climate money before the next election.
Federal Finance Minister Christian Lindner does not want to decide on the payment of the climate money planned by the traffic light until the next legislative period. “From 2025 we can technically make a per capita payment. This means we are on schedule. Whether we politically restructure the funding landscape in this direction will have to be decided after the next election,” said the FDP politician from the “Neue Osnabrücker Newspaper” (NOZ) according to the preliminary report.
High income through CO2 pricing
Previously, some politicians, economists and consumer advocates had called for climate money to be paid out quickly in order to compensate for the increase in CO2 prices for consumers at the beginning of the year. This makes refueling and heating more expensive.
The CO2 price for all fossil energy sources such as heating oil, natural gas, gasoline and diesel has existed in Germany since 2021. The consumption of these raw materials is becoming more expensive, which is intended to contribute to climate protection. The price for emitting one ton of CO2 rose from 30 to 45 euros at the turn of the year. In 2025 the price should be 55 euros.
Last year, Germany again received a record sum from the sale of carbon dioxide pollution rights – around 18.4 billion euros. That was around 40 percent more than in 2022, as the German Emissions Trading Authority (DEHSt) announced. The money therefore flows entirely into the Climate and Transformation Fund (KTF), from which energy transition and climate protection measures are financed.
CO2 certificates used for other purposes
Lindner said the idea of climate money is to transfer the income from the per capita CO2 price back to people. “Currently, the income is used to promote heating, building renovations, green steel production, charging stations for electric cars and so on. In short, because one household receives funding for a heat pump, several hundred others cannot receive climate money that year. You can’t spend the money twice. So the climate money would replace the subsidies we have now,” he told the NOZ.
In his view, a decision on such a system change can only be made after the next federal election. The SPD, Greens and FDP had agreed in the coalition agreement: “In order to compensate for future price increases and to ensure acceptance of the market system, we will develop a social compensation mechanism beyond the abolition of the EEG levy (climate money).”
If the CO2 price rises for climate protection reasons, money should be put into citizens’ accounts to compensate. First of all, technical requirements must be created for direct payment to citizens. According to the Federal Ministry of Finance, this should be possible in 2025.
Relieve the burden on small and medium incomes
The President of the German Institute for Economic Research (DIW), Marcel Fratzscher, had previously called for immediate government climate money to compensate for rising energy prices. “Climate money should also send the signal: Yes, climate protection is important. But we also provide targeted relief to people with small and medium incomes,” Fratzscher told the “Web.de” portal. Otherwise the impression would arise that politicians decide on expensive things like the CO2 price and then leave citizens to deal with the consequences, criticized the economist.
It is “high time” for the traffic light coalition to implement climate money. The opposition also criticized again. “The traffic light increases the CO2 price, but does not relieve the burden on citizens by simultaneously returning the income,” said deputy CDU chairman Andreas Jung. This creates a social imbalance that damages the acceptance of this important instrument for climate protection.