_ Yuri Kofner, economist, MIWI Institute for Market Integration and Economic Policy. Munich, 27 November 2023.
Germany’s national CO2 levy on fossil fuels in the building and transport sector was introduced by the CDU/CSU-led federal government as a national solo effort five years before the planned introduction of the EU ETS-2 in 2026.
The CO2 levy is largely responsible for the rampant greennflation in Germany and the impoverishment of the German citizens.
Compared to 2020, the drastic 33 percent increase in the CO2 levy from 30 to 40 euros per tonne of CO2 from 2023 to 2024 will increase the price of a litre of petrol by around 14.1 cents, a litre of diesel by around 15.8 cents, [1] a litre of heating oil by around 12.7 cents, gas by around 1 cent per KWh, [2] coal by 4.5 cents per KWh [3] and a tonne of incinerated waste by around 17 euros. [4] In addition to energy carriers, the CO2 levy makes food and catering in particular more expensive.
The SVR estimates that the overall inflation rate (HICP) will be 2.8 percentage points higher by 2026 due to the carbon tax than it could be without it. [5] Similar inflationary effects are also calculated by KfW Resarch. [6] The inflation rate in Germany is already estimated at 6.1 per cent for 2023. [7] Raising the CO2 tax in 2024 would increase this to 6.6 per cent, ceteris paribus.
The effective CO2 price in Germany is five times higher in road transport than in the USA and China, and ten times higher in the building sector. [8]
The CO2 levy is socially regressive, as it impoverishes households with lower incomes, more family members and those living in rural areas in particular, as they have to spend a relatively larger proportion of their income on heating and car mobility. [9]
In addition, green inflation will receive a major boost in 2024 from the introduction of the CO2 toll, the renewed increase in VAT on catering, gas and heating, the increase in vehicle tax and the expiry of the “energy brakes”.
For the reasons mentioned above, the anti-economic, inflation-driving and socially regressive Fuel Emissions Trading Act (BEHG) must be completely and definitively abolished immediately.
Sources
[1] ADAC (2023). CO2-Steuer: Was der Anstieg für Autofahrer bedeutet. URL: https://www.adac.de/rund-ums-fahrzeug/auto-kaufen-verkaufen/kfz-steuer/co2-steuer/
[2] Weigl B. (2023). Der CO2-Preis steigt: So teuer werden Gas, Heizöl und Sprit. Finanzip. URL: https://www.finanztip.de/co2-steuer/
[3] Berechnet anhand von: Quaschnig V. (2022). Spezifische Kohlendioxidemissionen verschiedener Brennstoffe. HTW Berlin. URL: https://www.volker-quaschning.de/datserv/CO2-spez/index.php
[4] Berechnungen anhand von: NABU (2020). CO2-Preis für Verbrennung von Abfällen ist notwendig und wirksam. URL: https://www.nabu.de/imperia/md/content/nabude/konsumressourcenmuell/200629_nabu_behg_final.pdf
[5] Berechnungen anhand von: Nöh L. et al. (2020). Auswirkungen einer CO2-Bepreisung auf die Verbraucherpreisinflation. SVR. URL: https://www.sachverstaendigenrat-wirtschaft.de/fileadmin/dateiablage/Arbeitspapiere/Arbeitspapier_03_2020.pdf
[6] Herold J. et al. (2022). Grüne Inflation? Zwischen Klimaschutz und Preisniveaustabilität. KfW Research. URL: https://www.kfw.de/PDF/Download-Center/Konzernthemen/Research/PDF-Dokumente-Fokus-Volkswirtschaft/Fokus-2022/Fokus-Nr.-368-Februar-2022-Gruene-Inflation.pdf
[7] ifo Institut. (2023). Gemeinschaftsdiagnose. Herbst 2023. URL: https://de.statista.com/statistik/daten/studie/5851/umfrage/prognose-zur-entwicklung-der-inflationsrate-in-deutschland/
[8] OECD (2023). Effective Carobn Rates. URL: https://stats.oecd.org/?datasetcode=ecr
[9] ifo Institut (2021). Wie fair ist die Energiewende? Verteilungswirkungen in der deutschen Energie- und Klimapolitik. URL: https://www.ifo.de/publikationen/2021/aufsatz-zeitschrift/wie-fair-ist-die-energiewende-verteilungswirkungen-der