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Germany Comes Up with Climate Package Worth 50 Billion Euros Without New Debts

According to the latest reports, Germany is set to finance a climate package worth over 50 billion euros (55 billion dollars) over the course of the next 4 years. The move has been taken to lower carbon emissions and protect the climate as well as restore the green credentials of it. The package, as unveiled yesterday, has been agreed upon by the ruling coalition of Chancellor Angela Merkel.

Interestingly enough, this new climate package will stay budget-neutral. That means, the country won’t take on any new debts for financing the measures, revealed the reports.

The Chancellor’s conservatives along with their Social Democrat partners (SPD) engaged in a long overnight negotiation to come to agreements on the plan by the self-enforced deadline of Friday. It’s crucial to note that thousands of people took to streets in Berlin and all across the world, inspired by the movement started by Swedish teenager activist Greta Thunberg, to demand quicker actions to control climate change.

While announcing the plan at the conference, Merkel acknowledged the fact that the country had fallen short of its earlier aim of reducing carbon emission levels by 40 percent by 2020. She further said that now they aim to lower it 55 percent by 2030.

The new plan incorporates several changes including the introduction of domestic carbon emission pricing plan, increased taxes on national flights, higher tolls for trucks beginning 2023, the bigger incentive for purchasing electric cars, and reduction in sales tax on railway tickets for encouraging train transportation.

Olaf Scholz, Germany’s Finance Minister, termed the plan as a powerful package as it would offer multiple opportunities for putting a halt on climate change. Per the reports, Merkel also stated that the government would be reviewing its progress on an annual basis so that any additional measures if required, can be taken on time. Reports also quoted Merkel say,

The chances are very good, they have grown, that we will reach our climate goals this time, better than with the 2020 target.”

As per the new plan, the country is set to introduce a pricing system for carbon emission for transport as well as heating in buildings. It will start in 2021, beginning at ten euros a ton. In 2022, the price would double to twenty euros and then increase by 5 euros per year to arrive at 35 euros in 2025.

The agreed-upon starting price is less than what climate economists were advocating, which was 40-euro pricing. Many environmental activists expressed their disappointments regarding the plan, opining that it isn’t aggressive enough to effectuate the desired change.

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Jodie Miller

Jodie Miller is experienced journalist. She holds double degree in journalism and communication. She joined our team as a content curator. She enjoys writing and curating contents related to finance and forex world.

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