As tens of thousands took to the streets of Berlin and other major cities around the world to demand urgent action to tackle the climate crisis, Germany’s coalition government unveiled a new package of policies that could also help shore up Europe’s biggest economy.
Speaking at a news conference to present the plan, Chancellor Angela Merkel acknowledged that Germany was falling short of its original goal of cutting carbon emissions by 40 per cent from 1990 levels by 2020.
Now it is aiming for a 55 per cent reduction by 2030, she said.
“We must say with a high degree of probability that the target we set ourselves in 2007 will unfortunately not be met,” Chancellor Merkel said.
“And that’s what’s bothering me, that’s bothering many others.”
The program will include subsidies for replacing oil-fired central heating systems, as well as a cut in sales tax on rail tickets to encourage more Germans to travel by train.
Taxes on air travel will increase and the introduction of a carbon emissions pricing system will push up the cost of petrol and diesel for drivers.
“I think that this is a very powerful package that gives us many opportunities to be able to stop climate change,” said German finance minister Olaf Scholz.
“And because we have set ourselves the goal to keep reviewing where we stand this time, it will easier to hit the targets.”
The measures will not mean additional government borrowing, allowing Germany to continue its policy of a balanced budget.
Environmental activists said the government has missed an opportunity.
“I am deeply disappointed,” said Annalena Baerbock, leader of Germany’s opposition Green Party, on Twitter.
“What the climate needed was fast, forceful, binding. What we got was slow, feeble and non-binding.”
Professor Ottmar Edenhofer, director of the Potsdam Institute for Climate Impact Research, described the government’s plan as a “document of political despondency.”
“With this decision, the German government will not achieve the climate targets it has set itself for 2030,” he said in a statement, adding that the carbon pricing system was not aggressive enough to bring about the desired change.
Activists and some economists had hoped Germany would use its considerable financial firepower to tackle two challenges at the same time: the climate crisis and a looming recession that could drag down Europe’s economy.
With negative interest rates, the German government can effectively borrow for free for decades to come.
Writing earlier this week, economists at German bank Berenberg said the green policy package would likely support demand in Germany.
“However, the German stimulus will not be a European, let alone a global game changer,” they added.