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Research Findings Indicate Potential for Up to €15 Billion in Future Public Funding for Climate-Harmful Incentives by the Government

Government proposes billions in subsidies potentially boosting climate damage, estimated at a staggering 15 billion dollars.

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Operational coal power station identified in North Rhine-Westphalia region
Operational coal power station identified in North Rhine-Westphalia region

Revealing New Climate-Harmful Incentives: Up to €15 Billion at Stake!

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Research Finds Potential for 15 Billion Dollars in Fresh Subsidies for Climate Harming Initiatives by Government. - Research Findings Indicate Potential for Up to €15 Billion in Future Public Funding for Climate-Harmful Incentives by the Government

Behold the shocking revelation that the estimated value of climate-destructive subsidies could amount to similar levels as the funding for the Climate and Transformation Fund (KTF), averaging a whopping €10 billion annually. This fund, as instructed by the Basic Law, is designed to steer Germany towards carbon neutrality by 2045.

Swantje Fiedler, a FÖS researcher and co-author of the study, sheds light on the unsavory reality. "The coalition agreement between Union and SPD contains numerous measures that not only maintain but bolster existing climate-damaging subsidies," she warns. The majority of the new incentives stem from the energy sector at €5.9 to €9.8 billion and the transport sector at €1.9 billion."

The study singles out specific issues in the transport sector such as the increase in the commuting allowance worth €1.4 billion and the reduction in air traffic tax at €0.6 billion. In the energy sector, highlights include the share of fossil energies in the planned reduction of the electricity price at €4.0 to €4.4 billion and the promotion of new fossil gas power plants at €1.9 to €5.4 billion.

The FÖS analysis also flags subsidies for a lower industrial electricity price (€0.3 to €0.7 billion), for cheaper agricultural diesel for agricultural businesses (€0.2 to €0.5 billion), compensations for industry due to the new EU emissions trading for transport and buildings (up to €0.9 billion), and agricultural compensations (up to €1.1 billion).

Despite the uncertainty surrounding the minimum and maximum amounts, which depend on the design of the measures agreed upon in the coalition agreement between Union and SPD, FÖS highlights other dubious measures whose effects and costs are yet to be accurately evaluated. The issue with gas power plants is that while additional capacities might be required, they should be aimed at a binding transition to climate-friendly gases like hydrogen and not to the planned extent.

"The special asset is intended to enable additional investments in climate protection," laments Stefanie Langkamp, head of Politics at the Climate Alliance. However, the positive impact of the special asset is overshadowed by new climate-damaging incentives such as the increase in the commuting allowance or the promotion of additional gas power plants. Langkamp criticizes Union and SPD for seeking to slash key climate protection programs while simultaneously boosting the promotion of fossil infrastructures.

Anja Gebel from Germanwatch echoes similar concerns. "The planned incentives jeopardize the modernization of the German economy towards a climate-neutral and resilient future," she bemoans. Given the dearth of public funds and mounting climate risks, it's unconscionable to persist in propping up fossil business models. Instead, priority should be given to incentives that foster climate-friendly change and sustainable business models.

SubsidiesFederal GovernmentSocial Democratic Party (SPD)GermanyCoalition AgreementClimateGas Power PlantBerlinSocial Market EconomyKTFClimate Alliance

Sources: 1. Federal Government's Coalition Agreement 2021 – Climate and Energy 2. Climate-Damaging Subsidies in the German Energy and Transport Sectors 3. Position Paper: Future Power Mix 4. Climate Action & Resource Efficiency 5. The National Climate Action Plan – Measures and Goals

  1. The estimated value of climate-destructive subsidies in EC countries, such as Germany, could potentially equal the funding for the employment policy, averaging a staggering €10 billion annually.
  2. Swantje Fiedler, a researcher from the FÖS, warns that the coalition agreement between the Federal Government and the Social Democratic Party (SPD) contains measures that not only maintain but bolster existing climate-damaging subsidies, with the majority originating from the energy and transport sectors.
  3. The study specifically points out issues in the transport sector, such as the increase in the commuting allowance and the reduction in air traffic tax, and in the energy sector, including the share of fossil energies in the planned reduction of the electricity price and the promotion of new fossil gas power plants.
  4. The FÖS analysis also highlights subsidies for a lower industrial electricity price, cheaper agricultural diesel for agricultural businesses, compensations for industry due to the new EU emissions trading for transport and buildings, and agricultural compensations.
  5. Stefanie Langkamp, head of Politics at the Climate Alliance, laments that the special asset intended to enable additional investments in climate protection, is overshadowed by new climate-damaging incentives like the increase in the commuting allowance or the promotion of additional gas power plants.
  6. Anja Gebel from Germanwatch bemoans the planned incentives, stating they jeopardize the modernization of the German economy towards a climate-neutral and resilient future, and it is unconscionable to persist in propping up fossil business models when public funds and mounting climate risks are a concern. Instead, priority should be given to incentives that foster climate-friendly change and sustainable business models.

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