According to economic and climate researchers, government relief measures during energy crises should include incentives to save energy; instead, the federal government recently acted in a way that was “harmful to the climate” by cutting taxes on fossil fuels. In contrast, a more climate-friendly measure would be, for instance, lower electricity taxes, explained researchers from the Munich-based Ifo Institute, the Potsdam Institute for Climate Impact Research (PIK), and the University of Potsdam.
Germany made a total of up to 187 billion euros available during the energy crisis triggered by the war in Ukraine, Andreas Peichl of the Ifo Institute stated on Monday. Of this amount, around 71 billion euros went toward targeted aid for oil and natural gas customers.
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“If a state cuts taxes on petrol, diesel, or gas, it primarily provides relief to households and companies with high consumption levels. At the same time, it dampens the price shock that is actually intended to encourage conservation,” explained Matthias Kalkuhl of the PIK. He advised that, subsequently, care must be taken to refinance such measures through higher levies on fossil fuels. In contrast, lower taxes on electricity make that energy source cheaper relative to oil and gas and provide relief to many households without directly lowering the cost of consuming fossil energy.
Another point of criticism: “Aid programs foster a reliance on the state for the future should oil prices rise again,” explained Ulrich Eydam of the University of Potsdam. “Ultimately, they represent a taxpayer-funded insurance policy that slows the transition to domestic, electricity-based energy technologies.”
According to the Ifo Institute, the study also highlights the extent of Europe’s dependence on fossil fuel imports. On average, the EU meets around 57 percent of its energy needs through imports. In 2023, Germany imported fossil energy worth approximately 80 billion euros; these imports cover 67 percent of domestic energy consumption. If global market prices were to rise permanently by 50 percent, import costs for Germany alone would increase by around 40 billion euros annually—an amount equivalent to roughly one percent of German economic output.
Author: AFP – ilo/pe – Translated by Blackout News
Sources: AFP Press Portal