The deputy president of the Leibniz Institute for Economic Research Halle (IWH), Oliver Holtemöller, misses social compensation in the planned increase in the CO2 price. The professor of economics told MDR on Wednesday after the federal government’s budget agreement.

“Raising the CO2 price is something that economists have recommended for a long time in order to efficiently achieve climate protection goals,” said Holtemöller. “The concept that economists recommend actually also includes ensuring social balance. This means, for example, returning the income generated by CO2 pricing to citizens and companies in the form of climate money. This component is not present in the package – at least according to current knowledge – and that is certainly a defect.” Other components of the agreement are very welcome.

Four weeks after the Federal Constitutional Court’s historic budget ruling, the traffic light coalition agreed on how it wanted to close the billion-dollar hole in the 2024 federal budget. Among other things, the plan is to increase the CO2 price more strongly, which will have an impact on gasoline and gas prices.