Another note in the long Carbon Tax wars. This is Otmar "director of the Potsdam Institute for Climate Impact Research" Edenhofer in conversation with Sarah Zerback. Since it is in foreign, I have So it's nice to see "even 20 euros brings something". In true perfect-is-the-enemy-of-the-good style, some people argue for implausibly high levels of carbon price, which is just going to get it thrown out. I think there's a lot to be said for just having an explicit carbon tax, getting people used to it, and worrying about increasing it later1. I don't see him explicitly pointing this out, though. Notice though that the interviewer is pretty keen on getting details of the price and returns to the subject. The other nice part is that he's noticed the Skolstrejk för klimatet2 vs the "Gilets Jaunes" tension and observes - correctly - that the Sfk stuff is an opportunity: because it is, perhaps, and indication visible to pols that the public is finally willing to make some hard choices.
Less good is his equivocation about carbon tax vs trading systems. He's probably a bit stuck because he isn't allowed to say that the ETS is stupid. But he goes further than that, suggesting the possibility of introduc[ing] a separate emissions trading system for these three sectors, transport, agriculture and heat, to which my response would be FFS not another bloody boondoggle, haven't you learnt anything in all these years? He also wurbles about sector-specific targets at national level, which is also stupid.
Quasi-interesting is the role of "European obligations": We are in a completely different debate. We have European obligations, and all Member States of the European Union have these obligations. Those who fail to comply with these obligations must buy certificates from other countries, and not voluntarily, but this is simply a sanction imposed by the European level on each Member State. He doesn't talk about how binding those obligations might be, if things get tough.
Notes
1. Of course those opposed to a carbon tax are fully aware of this cunning plan, and will tell people that it is just the thin end of the wedge, but there's no point in making their job easy.
2. He - or the Googly translate - uses "Fridays for Future" but I'm guessing it is much the same.
The text
New debate on CO2 tax"Even 20 euros bring something"
The climate researcher Otmar Edenhofer supports the initiative of Federal Environment Minister Svenja Schulze to raise a CO2 price on gasoline, diesel, heating oil or natural gas. Unlike in the 1990s, he believes that a CO2 tax is enforceable this time. One reason for this: European legal obligations.
Otmar Edenhofer in conversation with Sarah Zerback
Sarah Zerback: I now greet Otmar Edenhofer, director of the Potsdam Institute for Climate Impact Research, on the telephone. Good day, Mr. Edenhofer!
Otmar Edenhofer: Hello!
Zerback: You've been pleading for a carbon tax for a long time now. Did the "Fridays for Future" demos only have to come, so that new momentum comes into an old idea?
Edenhofer: Yes. This movement was extremely significant, because a few months ago, when you said CO2 price, then one has been countered by the policy, we want to prevent the yellow vests in Germany. Now there is a new movement that says we want carbon pricing. It does not necessarily have to be a tax, it can also raise CO2 prices differently, but that is indeed giving new impetus to the political debate, which is urgently needed.
Zerback: And above all, there is debate about how expensive the whole thing should be now. What's your suggestion, how expensive, if it was a tax, how expensive should that be?
Edenhofer: First of all, you have to see that we have tasks in two areas. One is the electricity sector and the industrial sector, which is under European emissions trading, and there Christoph Schmidt and I have suggested that there is a minimum price, which now starts at 20 and is expected to grow to 35 euros by 2030.
Now there is a second area, and in this second area - which is poorly understood - we have European obligations, and if we fail to meet these European legal obligations in the agricultural, heating and transport sectors we may have to pay high penalties to the other states Afford. Now begins the dispute, how can the government this price signal, which after 2021 will be yes in Europe, how can this be translated now at the national level.
In the climate protection law one says yes, that should then make the individual ministries. That does not seem to me to be such a good idea, because the Transport Minister has many options to avoid. He can make meaningful spending cuts in his budget.
What matters now is that citizens - motorists who invest in new heat pumps, even in the agricultural sector - should have the incentive to save CO2 and other greenhouse gases. There are basically two ways you could do that. So you could charge a carbon price, a carbon tax for these sectors - that would be an option. But the other possibility would be to introduce a separate emissions trading system for these three sectors, transport, agriculture and heat, and then ensure that the quantity targets that we have been imposed by the European level are actually met. That's what the argument is about.
Order of magnitude for CO2 price still has to be calculated
Zerback: Thank you, that you have in the complexity above all else again aufgedröselt. Let's go into the details again. The President of the Bundestag Wolfgang Schäuble, who says that no matter whether tax or certificates are more expensive, this goes in the same direction. Let's talk about the altitude again. So you say 20 euros now. We have just heard it in the report again. There are others who say that we need at least 50 euros, otherwise it will not help at all.
Edenhofer:First of all, if 20 euros does not bring anything, that's not true. Of course, bring 20 euros already something. We see this in the empirical investigations that this also already reduces the emissions. The key question is, will emissions go down as it is compatible with European obligations, and we do not know exactly how high the price has to be, and therefore it would be reasonable to think about an emissions trading scheme, because then there can control the amount. Then you can set a minimum price that is on this scale. You start at 20, grow up to 35, maybe 50 Euro. Where exactly the orders of magnitude are, we are still in the process of calculating that. If the price rises too much,
Essentially, it will be a question of defining such a price corridor, and this price corridor, where it is now, we are in the process of calculating that and giving more precise information. I'm not going to comment on that right now because we're just doing the research.
"We are in a completely different debate"
Zerback: Yes, the question is really whether national measures bring anything. I'm wondering if you might feel personally reminded of the '90s. Since there was ever the push to tax CO2, as a tax on it to introduce. That is because then failed because it needs unanimity in the EU. So you still see this danger?
Edenhofer: No, I do not see that at all. We are in a completely different debate. We have European obligations, and all Member States of the European Union have these obligations. Those who fail to comply with these obligations must buy certificates from other countries, and not voluntarily, but this is simply a sanction imposed by the European level on each Member State.
It's not about the question of whether we want to formulate our own goals now. From my point of view, one can discuss the national sector targets cheaply, one can make it more flexible where I would be, but there is no way around European law obligations. This has nothing to do with whether there are any majority principles in the European Union, whether a tax is enforceable. We have these national commitments, and any proposal that is to be taken seriously must show that we can actually comply with this European law obligation with this proposal.
Sector-specific savings targets conceivable at national level
Zerback: Nevertheless, the CDU was so far always against it. Now there are voices that join the proposal of the Federal Environment Minister yes. Do you share the worries of Svenja Schulze, that perhaps there is a calculus to avoid other savings targets?
Edenhofer: I think that if you want to introduce a CO2 price that is so low that the savings targets can not be achieved at the European level, that is a suggestion that makes no sense. This is an obvious calculation, and this calculation will quickly hit the wall, because these proposals do not continue. It is only the suggestions that ultimately lead us to say that, after 2021, we are actually actually achieving the emission reduction targets in agriculture, the transport sector and the heating market.
The only dispute we can make is whether we need sector-specific targets at national level in addition to these European goals. I think we would be well advised to allow great flexibility at national level here.
Statements by our interlocutors reflect their own views. Deutschlandfunk does not embrace the statements of its interlocutors in interviews and discussions.
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'aufgedröselt' = 'disentangled'
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