Climate Damaging Subsidies Cost Germany 46 Billion Euros Per Year


A study conducted by Green Budget Germany (FÖS) states that 46 Billion Euros in Germany spent for climate damage. The report stated that if Germany gradually reduced ten particularly climate-damaging subsidies in the energy, transport and agriculture sectors, the federal budget could save some 46 billion euros annually.

At the same time, emissions would be reduced by 100 million tonnes of CO2 equivalents per year. The researchers list the abolition of tax exemptions for kerosene, the phasing out of industry exemptions from paying the renewable energy surcharge on power and tax reliefs for power generation as three particularly effective levers for linking climate action with budget savings. Other changes would include scrapping the value added tax (VAT) exemption for international flights, the tax privilege for commuters and the reduced VAT on animal products. With the current climate measures in place, Germany will not achieve its 2030 greenhouse gas reduction target and fall short by around 71 million tonnes CO2 equivalents, the Federal Environment Agency (UBA) has calculated. The emissions reduction achieved by scrapping or phasing out the above subsidies could make achieving the target possible, the researchers argue.