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Study: Carbon Pricing in Germany: Future Outlook and Priority Areas

Carbon pricing through emissions trading has permeated the mainstream political discourse on climate policy in Germany. Developments such as the setting of more ambitious climate targets and the evolution of the emissions trading framework at the European Union level have contributed towards the emergence of carbon pricing as prominent climate policy instrument. In the backdrop of Germany’s legislation on its national emissions trading system coming into force in January 2021 and the Fit for 55 Package released by the European Commission in July 2021, several aspects relating to the carbon pricing system remain unclear and require further political action.

This policy paper provides reflections on the recent political discourse on carbon pricing in both Germany and the European Union, and outlines priority areas for intervention in Germany focused on the review and revision of the national emissions trading legislation, the development of a set of policy measures to support emissions trading in the road transport and buildings sector, the clear and transparent design of social compensation measures on an urgent basis, and targeted political communication about carbon pricing with end-consumers.

You can download the executive summary of the study here.

The full study can be downloaded here.