German climate package to cost government 4-5 billion euros per year initially: SPD By Reuters

© Reuters.  German climate package to cost government 4-5 billion euros per year initially: SPD

© Reuters. German climate package to cost government 4-5 billion euros per year initially: SPD

BERLIN (Reuters) – A major climate package Berlin is due to announce this week will cost the government 4-5 billion euros per year initially, a Social Democrat said on Monday, as the finance minister called for an increase in domestic flight taxes.
Merkel’s Christian Democrats (CDU), their Bavarian Christian Social Union (CSU) sister party and the center-left Social Democrats (SPD) are expected to present plans on Sept. 20 such as extending grants for electric car buyers, expanding a network of charging stations, raising road taxes for polluting vehicles and improving heating systems for buildings.
The coalition partners are divided on how to finance Germany’s march toward a green future, with Merkel’s conservatives cast as more eager to ensure that the burden of financing the measures does not hurt German industry. The SPD wants to protect low earners.
Asked how much the climate package would cause in additional costs for the government, Johannes Kahrs – a budget policy expert for the SPD – told German broadcaster ARD: “In essence, you’ll need fewer billions at the start – you’ll manage with 4/5 billion (euros) a year – that will then of course rise.”
He said income would come from whatever the coalition parties compromise on – be it an emissions certificate trading system or a CO2 tax.
“This must be integrated into this budget and then consolidated step by step because you have to reconfigure the whole industrial landscape, the whole country, that could also be a big job driver and economic package,” Kahrs said.
He said the state should help so that people on small and medium incomes or commuters would not face additional burdens but should instead get subsidies to buy new cars and switch their heating systems.
Kahrs said there was money in the energy and climate fund that could be used.
“I think we can rearrange funds in the remainder of the budget so that we think we can start this without new taxes,” he said.
The climate protection measures the government wants to unveil on Friday cost at least 40 billion euros until 2023, a person briefed on the talks told Reuters on Saturday.
German Finance Minister Olaf Scholz said he wanted to increase taxes on domestic flights in a bid to tackle CO2 emissions, telling Bild in a video interview on the newspaper’s website: “We have the ticket tax and we want to increase it for domestic flights.”
Scholz, a member of the Social Democrats, appeared to agree with Merkel’s Christian Democrats (CDU), who want to increase taxes on domestic flights, according to a party document seen by Reuters on Friday.

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