Germany's Climate Targets: Unveiling the Fossil Fuel Subsidy Opportunity
A study by the Center for European Economic Research reveals that cutting fossil fuel subsidies could help Germany achieve a third of its climate targets cost-effectively. Subsidy reductions would also boost public finances and mitigate environmental and health costs, highlighting a significant opportunity for climate and economic benefits.
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- Germany
A recent study by the Mannheim-based Center for European Economic Research emphasizes that reducing fossil fuel subsidies could enable Germany to meet a third of its climate targets without requiring additional measures like carbon pricing.
Germany is currently the largest provider of fossil fuel subsidies in the European Union, with government support reaching 41 billion euros in 2023, as reported by the EU's environment agency. Critics argue that using the Climate and Transformation Fund to lower gas prices squanders resources on harmful fossil gas industries.
The study also indicates that subsidy cuts could improve public finances by accounting for hidden costs of fossil fuels, such as health and environmental damage. This approach could generate extra tax revenues, as fossil fuel subsidies significantly contribute to global economic output.
(With inputs from agencies.)
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