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Climate change: These subsidies harm the climate

2019-09-19T06:05:45.772Z

The Federal Government is discussing a new climate protection package - and promoting environmentally harmful behavior with millions. Which subsidies are particularly harmful to the climate



If the Climate Cabinet presents its decisions on Friday, then they should do two things above all: German emissions of climate-damaging greenhouse gases should fall as fast as possible to 40 percent below the 1990 level - actually this goal should be achieved already in the coming year, but it will certainly not work anymore. And by 2030, the emissions must certainly have fallen by 55 percent. The Federal Government is committed to achieving its goals.

How they should be achieved, however, the coalition still argues about. It is paradoxical: Time is short, but at the same time the public sector pays climate-damaging subsidies in large amounts to companies and citizens in Germany. For example, in a report, the Federal Environment Agency lists 29 types of subsidies that directly affect the climate. Not only does it consider direct cash flows and tax benefits as subsidies, but it also takes into account benefits that companies receive cheaply from the state, for example, when the government allocates emission allowances to certain companies for free.

The Federal Agency for Nature Conservation has calculated in a study by Aprildieses year that the natural and climate-damaging subsidies total about 55 billion euros - about 16 percent of the budget expenditures of last year. Cutting these subsidies would relieve public funds relatively quickly. The climate too. Which are they? A selection:

Low energy taxes for the industry

In some cases, companies pay a lower electricity and energy tax than usual. For example, in the particularly energy-intensive glass, ceramics or cement industry: Here, some production processes are completely free of electricity and energy taxes. In other sectors of the manufacturing industry, companies receive a discount on request; then the state pays back to them 25% of the standard rate of electricity and energy tax. This option is available for construction companies, mining companies or water suppliers.

Companies of the manufacturing industry can also receive a discount on the eco-tax, the so-called ecotax compensation. The eco-tax is levied as a surcharge on the energy and electricity tax; The Federal Government introduced it in 1999 and lowered the pension contributions in return. If an individual company is more heavily burdened by the eco-tax than the lower pension contributions relieve it, it can apply for peak compensation and get back 90 percent of the balance. However, the prerequisite is that the company work to improve its energy efficiency.

The government justifies the subsidies, among other things, that companies should remain competitive. However, sweeping whole industries often receive the benefit. Whether the individual companies are actually in international competition, is not tested.

The Forum for Ecological Social Market Economy (FÖS) has examined the environmentally harmful subsidies on behalf of Greenpeace. The experts criticize that some companies benefit twice, for example, they take advantage of the 25 percent discount on the electricity and energy tax and pay at the same time because of the eco-tax lower pension contributions. Demand to abolish the rebates on the energy and electricity tax and gradually reduce the peak compensation and the tax exemption of energy-intensive processes gradually. That is necessary to create the climate goals. For companies that are highly competitive in international competition, a hardship rule would be conceivable.

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Gifts in emissions trading

Another subsidy for energy-intensive industries applies to EU emissions trading : Some companies receive the emission allowances free of charge. In 2013, it was still 80 percent of companies, but by 2020, the rate should sink to 30 percent. If it goes by the will of the EU Commission, the governments may from 2030 no longer free emission allowances. However, there is a specific exemption for companies that could outsource their production abroad due to higher costs, because if they have less stringent emission rules, the climate would not be helped. Which companies they are, the EU Commission sets in the form of lists. The Federal Environment Agency finds the lists too extensive.

Another discount option is available for German companies: because electricity suppliers have to bid for 100 percent of their emission certificates, the price of electricity is rising - even for industrial customers. Firms in those industries that are feared to emigrate abroad can apply for compensation. But that reduces the impact of emissions trading. The Federal Environment Agency therefore demands that the compensation be abolished.

Incidentally, all electricity subsidies apply: they are paid irrespective of whether a company purchases green electricity or conventional electricity.

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Tax discounts for drivers

Motorists pay significantly less taxes on diesel than on gasoline - although diesel generates more CO2 per liter. The energy tax per liter of gasoline is currently about 65 cents, per liter of diesel it is only 47 cents. Although pay diesel drivers in return a higher vehicle tax. But once you own a diesel car, you have an incentive to drive more because of the relatively low fuel prices. The Federal Environment Agency therefore recommends taxing diesel at least equally. Also the FÖS demands to tax diesel higher.

A particularly important subsidy for motorists is the commuter rate , which probably everyone knows. For the journey between home and work, commuters can deduct 30 cents per kilometer from the tax. This makes commuting cheaper, long journeys to work are promoted. An abolition of the commuter tax allowance has been the subject of much debate in the past. However, the Union is currently demanding that it be increased if the gasoline price rises sharply due to the climate protection package.

The flat rate taxation of privately used company cars also promotes frequent driving. The rule works like this: If employees also use a company car privately, this is considered a pecuniary advantage, to which income taxes are due. To measure how high the benefit is, workers could keep a logbook. For the sake of simplicity, however, usually one percent of the car list price is used. With this flat-rate taxation, it makes no financial difference whether you drive a lot or a little by car. Often, the employer also pays the gas. In any case, it is better to make private trips by car than, for example, using public transport. Even self-employed or company owners profit from the company car regulation.

The consulting firm Copenhagen Economic has examined how the indirect subsidies affect the private car privilege in the EU. The result: there are more cars, which are used on average more. The government could change the incentives so that frequent travelers pay higher taxes. Environmental organizations and initiatives such as the Verkehrsclub Deutschland and Agora Verkehrswendefordern also require staggering company car taxation according to how much emissions a car causes. That would create a stronger incentive to buy cars that consume little.

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Money for frequent flyers

While motorists have to pay taxes on gasoline and diesel, kerosene is completely exempt from the energy tax. As a result, the government is subsidizing a type of transport that causes particularly high CO2 emissions. Until 2003, it was even forbidden in the European Union to tax aviation fuel. In the meantime there is a kerosene tax in the Netherlands and also in the non-EU country Norway.

In addition, international flights are exempt from VAT - they are only levied on domestic flights. The Federal Environment Agency advocates a uniform change throughout the EU. For example, EU countries could agree to charge VAT at the point of departure for the entire flight. If the Federal Government seeks a faster solution, it could, in a first step, levy VAT only on the section of the route that lies in Germany.

Also important is the aviation tax . It is € 7.38 per passenger for flights within the EU, € 23.05 for longer flights up to 6,000 kilometers, and € 41.49 for longer journeys. The FOE considers these rates too low. Currently, the aviation tax taxes the state about 1.2 billion euros per year - but the climate-damaging subsidies of air transport cost in the same period 10 billion euros, as the Federation for the Environment and Nature Conservation Germany (BUND) has calculated.

The FÖS calls for an increase in the aviation tax, and the Union has taken the proposal to the Climate Cabinet. In the long term, however, the climate-damaging subsidies for aviation must be completely eliminated, the FÖS demands.

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Tax rebate for consumption

For food, a reduced VAT rate of seven percent applies in Germany. It is also raised on meat, cheese and yoghurt , although animal husbandry causes many emissions. The Federal Environment Agency therefore demands that meat and dairy products should be subject to the standard 19% VAT rate. In return, the - also already reduced - VAT on bread, fruit and vegetables can be further reduced.

The proposal is controversial. Eating is an emotional topic. Higher VAT could also put a relatively heavy burden on people on low incomes, as they spend more of their budget on food than on the wealthier.

In 2008, the Institute for Environmental Studies examined on behalf of the European Commission how changes in VAT would affect consumer behavior. One result was that if all EU countries raised the VAT rate on meat and dairy products to the regular rate, people would eat two to seven percent less meat and two to five percent less dairy. This would save between 12 and 21 million tonnes of CO2 per year.

On hotel nights you pay the reduced VAT. They have an important share in the CO2 emissions of tourism. An overview of the WWF shows this by way of example: in the case of a relatively climate-friendly train journey from Düsseldorf to the Allgäu, for example with nine overnight stays in the three-star inn, the overnight stays generate more than one third of the CO2 impression of the entire trip. In addition, the discount basically promotes tourism - and according to a study of the University of Sidney accounts for around eight percent of the world's emissions.

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Source: zeit

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