Greenpeace cautions against ignoring funding for climate action.
At first, the German authorities intended to balance the increasing carbon emissions price by introducing a climate tax. But lately, it seems like this issue has been pushed aside. Greenpeace has sounded a warning bell about this, suggesting that it could pose a significant threat to society.
If no financial compensation is provided for the rising carbon emissions price at the pumps and for heating, households may face considerable additional expenses, as per a study by Greenpeace. To prevent this, Greenpeace is advocating for the immediate implementation of a climate tax. "A CO2 price without a climate tax is a social time bomb," states Bastian Neuwirth, who is an expert on climate issues at Greenpeace. Introducing a climate tax could significantly alleviate burdens even among middle-income households, as per a study conducted by the Forum for Ecological and Social Market Economy for Greenpeace.
The legally mandated carbon emissions price makes heating and fueling with non-renewable resources more expensive and is designed to promote eco-friendly consumption. It is slated to rise in the forthcoming years. The coalition members SPD, Greens, and FDP had agreed in their contract: "To compensate for any future price rises and to ensure acceptance of the market mechanism, we will create a social compensation mechanism beyond the cancellation of the Renewable Energy Sources Act (EEG surcharge) (climate tax)."
According to Christian Lindner, the Federal Finance Minister, a per capita payment could be feasible from 2025. However, a climate tax would cost billions. It's still uncertain whether and when the alliance will adopt this.
Assessment of the Greenpeace idea
In the study, the authors examine the total financial burden that households undergo due to carbon emissions prices. This includes not just direct emissions costs while heating or using fossil fuels but also indirect emissions costs incurred when companies pass on rising emissions prices to products such as food or household appliances. Unless there's financial compensation, households in the middle-income category would face approximately 700 euros in extra costs by 2025 and more than 1000 euros by 2027, the study indicates.
Greenpeace is proposing a climate tax where all revenue generated from the tax would be paid as a per capita flat rate. In 2025, the climate tax would amount to 317 euros per person. Additionally, the organization is suggesting a social scaling of the climate tax by taxing climate tax based on income. The lowest-income households would keep the complete amount of the climate tax, while the top 10% of households would have 100% of their climate tax taxed, effectively eliminating any benefit they receive.
By taxing the climate tax, 9 to 18 billion euros would be collected by the government. These funds could be used to help out households in the lower income brackets and support them in reducing their CO2 emissions.
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The Traffic Light Coalition, comprising SPD, Greens, and FDP, had agreed to create a social compensation mechanism to offset any future carbon emissions price increases and ensure the market mechanism's acceptance. However, Greenpeace voices concerns that without adequate financial compensation, many households could face substantial additional expenses due to climate money, as suggested by a Greenpeace study. Greenpeace, therefore, advocates for the immediate implementation of a climate tax, as stated by Bastian Neuwirth, an expert on climate issues at Greenpeace.
