Merkel’s Drive to Slash CO2 Output May Cost $44 Billion by 2023

(Bloomberg) -- Policies being hammered out in Germany to slash carbon emissions may cost 40 billion euros ($44 billion) over the next four years, underscoring the wide scope of Chancellor Angela Merkel’s plans to boost climate protection.

Meeting Friday in Berlin, party leaders from Merkel’s alliance progressed in agreeing steps to ensure that Germany meets a 2030 emissions target, according to a report by Reuters that cites an unidentified coalition aide. In preliminary discussions ahead of a climate cabinet on Sept. 20, participants suggested that some costs may be offset by revenue from selling pollution permits in Europe’s Emissions Trading Scheme, the news agency said.

The German government is currently targeting about 50 billion euros in potential costs for revamping climate policy, according to earlier reports. In the climate cabinet, coalition leaders are expected to set out a road map for meeting the target in 10 years and financial steps to pay for it.

In her weekly podcast on Saturday, Merkel underlined that Germany has no choice but to improve its record of subduing CO2 output after storm, floods, and prolonged heat spells tripled in frequency since 1970. Polls show climate protection topping voters’ lists of government priorities. More than 25,000 protesters took to Frankfurt’s streets Saturday to protest car sector emissions, according to the organizers.

“We must act,” Merkel said. “Of course -- and we can’t beat about the bush -- climate protection comes at a price. But I’m convinced if we don’t put this money in the right place, the price that we’ll pay later will be much higher.” Germany is set to miss its CO2-reduction goal for 2020.

Merkel’s revamp of climate policy will focus on moves to reduce CO2 output from transport, heating and farming, sectors that don’t participate in Europe’s ETS platform.

To contact the reporters on this story: Brian Parkin in Berlin at bparkin@bloomberg.net;William Wilkes in Frankfurt at wwilkes1@bloomberg.net

To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Andrew Blackman, Stephen Treloar

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