Expert Climate Council recommends broader approach on climate policy in Germany

The Council of Experts on Climate Change has released its biennial expertise on Germany's climate action measures. The independent panel has reviewed greenhouse gas emission trends to assess the effectiveness, economic viability, and social impacts of climate measures. The Expert Council provides recommendations for Germany's future climate policy, outlining requirements for the new government's climate action program within its first year.

Progress on emissions reduction

The Expert Council noted the trend of reducing greenhouse gas emissions has accelerated from 2014 to 2023 and considerable increase in climate policy efforts. It notes that higher energy prices and reduced demand in the industrial sector have led to lower emissions. However, the buildings and transport sectors have seen insufficient emission reductions due to slow adoption of non-fossil capital. The upcoming EU ETS 2 is likely to require additional measures to meet targets. Moreover, the land use and forestry sector has become a net greenhouse gas source, with emissions recently being much higher than expected.

Building new, non-fossil capital stock in the energy sector and a targeted reduction and change in the buildings and transport sectors are emphasized as key to progress.

Broader approach to climate policy

The Expert Council recommends adopting a comprehensive approach to climate policy, considering its interaction with other policy areas. It suggests implementing a central coordination mechanism to better integrate various policy domains and establishing a systematic monitoring and evaluation system to understand these interactions and transparently address conflicting objectives.

The Expert Council stresses that affordability should be central to planning climate protection measures. Based on multiple studies, the council highlighted that significant investments are needed for greenhouse gas neutrality. It notes, however, that these investments will significantly impact Germany’s economic output and recommends the government include them in long-term financial and economic planning.

Social and economic distributive effects

The Expert Council has examined the social and economic distribution effects of climate policies. It notes that vulnerable households face financial hardships from increasing climate measures in building and transport sectors. High-income households currently benefit more, and rising CO2 prices may worsen this imbalance. Thus, further support and compensation is needed to support vulnerable households. The Council advises that future climate policies should account for their social impact and take measures to address them.

With appreciation to Amineh Farasatmand for her contribution in preparing this blog.