RWI Positionen

RWI Positionen 72

Eckpunkte einer CO2-Preisreform

by Ottmar Edenhofer and Christoph M. Schmidt

12/2018, 12 S./p., 8 Euro

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Abstract

To reach the goal of the Paris Climate Agreement of limiting the global rise in temperature to well below 2°C we need to realize the aim of an emission-neutral global economy by the middle of this century. A sufficiently high global CO2 price that encompasses all sectors is the most cost-effective instrument to achieve this objective. However, CO2 prices in currently existing systems are too low and the pricing systems are not sufficiently coordinated at the international level. Germany should push for the introduction of a minimum price in the European Emissions Trading System (EU ETS), starting from 20 €/t CO2 in 2020, rising to 35 €/t CO2 by 2030. If this ambition were to prove politically infeasible, a grand coalition of willing EU member states could employ flexible national CO2 taxes to offset the difference between the price on the European certificate market and the agreed minimum price. Energy taxation in all non-EU ETS sectors, including transport and heating, should be reformed as well, oriented at the fuels respective CO2 content. This reform should avoid generating detrimental effects to low-income households, for instance by substantially reducing the electricity tax.

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