The IER at the University of Stuttgart is investigating the consequences of phasing out coal and of the energy revolution for German households
The pricing of carbon dioxide (CO2), which is now being hotly debated as an accompanying measure to phasing out coal and also as part of the climate protection law being planned, is ecologically and economically efficient and so makes sense. Without redistributional measures however, this instrument will lead to significantly higher costs for consumers depending on how it is structured. This is shown in a Policy Brief, which has now been published by the Institute of Energy Economics and the Rational Use of Energy (IER) at the University of Stuttgart. Up to 70 percent of households are affected, especially in the lower and middle-income brackets. The scientists from the IER investigated a project on scenarios currently being discussed affect household incomes. The scenarios include an orderly phasing out of coal as suggested by the Commission on Growth, Structural Change and Employment (KWSB) set up by the German government, as well as alternatively introducing more stringent CO2 pricing, for example by introducing a minimum price and combining these instruments with other accompanying measures. It was found that the CO2 pricing instrument leads to a significantly more cost-efficient transformation pathway, which makes it preferable from an economic perspective.
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