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Merkel announces a green 'Marshal Plan' of 54,000 million to combat the ghost of the recession

2019-09-20T14:26:23.689Z

Germany will allocate 54,000 million euros over the next four years to accelerate the transition to the green economy and will do so without resorting to indebtedness. That's the ambitions


Germany will allocate 54,000 million euros over the next four years to accelerate the transition to the green economy and will do so without resorting to indebtedness. That is the ambitious plan approved this Friday by the Executive of Chancellor Angela Merkel after almost five months of hard negotiations between the parties that make up the government coalition, the need to revive an economy on the verge of recession and the growing pressure from the public opinion about what some economic circles have called "climate hysteria".

"It has been difficult and complex negotiations, but constructive. Politics cannot deny the truth of science. Climate change must be stopped," Merkel said in the presentation of the agreement, while nearly 80,000 students demonstrated in Berlin in a new day of "Friday for the future", this time global. The movement of the Swedish teenager Greta Thunberg was thus noted also by thousands in other German cities and the world.

The objectives set in this kind of environmental Marshall Plan are those already assumed by Germany at the Paris conference, although now it is binding on a 22-page document. The energy sector should reduce greenhouse gas emissions by 61% by 2030 r in the 1990 levels, housing by 66%, traffic / mobility by 40% , industry by 50% and agriculture by 33% . In total, emissions should be reduced by 55% compared to 1990, the reference year taken by the international community.

The task will not be easy. The per capita CO2 emission rate in Germany is 8.9 million tonnes , well above the United Kingdom (5.7) or France (4.4). Germany did not comply with the commitments for 2010 and neither will it in 2020. Until 2018, the first European economy only proceeded to a 31% emission reduction compared to 1990. The appointment is now 2030 and Merkel said that "this time they will be fulfilled ".

And it won't be free either. The plan provides for new taxes on fossil fuels and that will directly affect households, generating one third of all emissions. Starting in 2026, heating fuel will be banned and, although there will be public support for the purchase of a new heating system, consumer associations fear they will not compensate for the rise in the cost of living. Users of urban and suburban transport may however balance their accounts with discounts on transport.

The companies, in spite of the opportunities that the new era can offer them, face a major technological reconversion, especially in the German star sector, the automobile. It has not been casual that this segment, one of the most polluting, is, after agriculture, the one that should cut the least, and that the minor partner of the government coalition, the Social Christian Union (CSU) of Bavaria, the host state of the large manufacturers, would oppose more firmly to measures against diesel and claim more vigorously incentives for the development of electric and hydraulic motors and digitalization. The Minister of Transportation, Andreas Scheuer, and one of the members of the negotiating commission, is from the CSU.

At the doors of an economic recession, but with ample room to reactivate the economy without giving up the mantra of "zero in black" in budgets, the environmental package arrives at the right time. The incentives for the purchase of electric cars should revive the sector, which has suffered a contraction of 12% in the last quarter. The improvements in urban transport and the much-needed federal rail network will allow, outside budgets, investments in public infrastructure. Only 11,000 million euros will be invested in the improvement of the railroad and to incentivize users of short flights, long-distance ticket prices will be reduced by 10%.

The negotiation of the climate package has been tortuous, especially with regard to financing. The Government had to overcome several obstacles. Not charging citizens with taxes that turn their action into unpopular, incentivize energy transformation, reactivate the economy without the package seems like an antidote against a budding recession that the government tries not to overvalue, force research and prepare German industry for the era of digital innovation. In the words of the Minister of Finance: "What we are doing is securing jobs. It is about using climate support to modernize the economy and achieve new jobs."

One of the first sources of funding on the table was to use the Fund for the financing of nuclear energy abandonment (NENFO), that is to say 24.1 billion euros that the 25 nuclear power plants contributed to cover part of the cost of their own closures . The proposal was launched by the finance minister, the social democrat Olaf Scholz, and was supported by the Bavarian Social Christian Union (CSU). The Minister of Economy, Peter Altmeier, in this case of the Christian Democratic Union (CDU), rejected it on the grounds that Finance lacks the powers to reach NENFO.

The discussion considered the creation of a national climate bond fund with fixed interests for the 2% investor. This modality was rejected, given the current price of money, with interest even in negative, the state would be cheaper to expand the debt. The last and toughest battle was fought around the wreck of carbon dioxide (CO2), a value at which the emissions of all greenhouse gases are measured. The question was to fix it through taxes - diesel, gasoline, gas - or in the certificate market. The SPD favored the tax, the CDU the market with certificates. The agreement has been Solomon. The price of the ton of CO2 - gasoline, diesel, gas and heating fuel - will be 10 euros to start and will increase to 35 euros until 2025 . From then on, the market will fix it. According to experts, 35 euros per tonne of CO2 will mean a rise of ten cents per liter of diesel at gas stations.

Time will tell if the plan with which Merkel will go on Monday at the Climate Summit in New York will encourage other nations to join the fight to save the planet, but Germany's path to clean renewable energy is now irreversible.

According to the criteria of The Trust Project

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  • Germany
  • Angela Merkel
  • United Kingdom
  • Paris
  • Greta Thunberg
  • France

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Source: elmuldo

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