Development of a National Emissions Trading System in Germany: Financial and Strategical Goals

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Abstract

The purpose of the article is to analyse the national emissions trading system in Germany, launched in 2021. The system is a development of the European Union's climate policy to reduce greenhouse gas emissions, which led to the launch of European emissions trading system in the electricity sector, industry, maritime transport and aviation, and is aimed at changing trends consumption of hydrocarbon fuels in the housing and transport sectors. The housing sector is the most difficult to fundamentally transform within the framework of a low-carbon economic growth paradigm. By 2025, the carbon price will reach 55 euros per tonne CO2e. Revenues from the national emissions trading system in 2021–2024 are estimated at 40 billion euros. It is concluded that the introduction of the fee will lead to a decrease in the welfare of low-income groups of the population, especially in rural areas, but in the medium term will not have a significant impact on energy consumption and greenhouse gas emissions. The system is used to finance the renewables to reduce the German electricity sector's dependence on imported natural gas. The European Union is launching an emissions trading system similar to Germany's in 2027 (ETS-2), which for German consumers will further reduce the welfare of low-income groups.

About the authors

M. V Sinitsyn

Primakov National Research Institute of World Economy and International Relations, RAS

Email: sinitsyn@imemo.ru
Research Fellow of the Center for Energy Studies Moscow, Russia

N. I Illeritskiy

Primakov National Research Institute of World Economy and International Relations, RAS

Email: illernick@yandex.ru
Research Fellow of the Center for Energy Studies Moscow, Russia

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