German government, states achieve breakthrough on climate package

Negotiators from Germany’s government and federal states on Monday reached a deal on a much-debated new climate action package, sources told dpa, paving the way for the upper house of parliament to approve it later this week.

The government had in September agreed the package to help Germany achieve its climate goals for 2030. But the upper house – the Bundesrat, which represents Germany’s 16 federal states – blocked several planned tax changes in the package.

It foresees, among other things, a price on carbon dioxide emissions in the transport and building sectors. Under Monday’s deal, it will start at 25 euros per ton on January 1, 2021 – up from the 10 euro introductory price planned so far.

It will then increase gradually to reach 55 euros by 2025, according to a paper prepared by the government and states. The goverment had so far foreseen 35 euros.

The revenue from the increased carbon price will be used to lower the country’s renewable-energy levy and thus be returned to its citizens, the sources said.

The deal also calls for the states to receive a total of 1.5 billion euros between 2021 and 2024 as compensation in order to achieve what the sources said is a fair distribution of revenues.

The negotiators were under pressure to deliver a deal so that the still pending parts of the climate action package can be approved by the Bundestag lower house and then by the Bundesrat on Friday. This will allow a tax reduction for train tickets to come into effect on January 1 as planned.

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