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Tue 14 2022

Germany is starting to become a problem for all of us

by bernt & torsten

The EU has invented a cunning climate weapon, simple and powerful. But Germany is slowing down. Again. The EU proposal Cbam is to impose a tax on imports that have caused large carbon dioxide emissions. Of course, doing something as rude as forcing climate sinners in other countries to pay for themselves is only possible because the EU has the world’s largest and richest consumer market.

Nobody wants to be banned.

Oil and the gas-rich United States, oil country Britain, fossil fuel Russia and coal-mining China are protesting. But even before the proposal has been hammered out, Cbam has done what was hoped for:

The US Congress is seriously discussing introducing its own climate tax to the US state because then American companies can set off the EU tax. Britain is investigating a reform they call Cbam, a copy of the EU’s. Even Russia has muttered about introducing a Russian climate tax.

Bingo, then.

The EU will probably be accused of barriers to trade. Imposing tariffs would be a violation of world trade rules. But now, since 2005, the EU has happened to have imposed a carbon tax on European industry. Imposing an equally high tax on imports will then not be discriminatory. On the contrary, justice is restored.

That particular fee is another cunning EU invention – emissions trading. It happens that, for all emissions that industry and power production make, they must have emission rights. Those who have large emissions are forced to pay dearly for extra dishes. Anyone with small emissions can sell their dishes.

It would have worked brilliantly if not for German industry, the leader of the opposition to carbon taxes. They said they needed more time to invent new technology. Otherwise, they would be forced to relocate production abroad in order not to lose competitiveness with the non-European industry. Germany’s constant footing on the brakes in the EU is starting to become a serious problem.

Politicians became so nervous that the first three years of emissions trading became voluntary. Subsequently, free quotas were introduced for large parts of the industry. Politicians were so generous that the industry was able to make a profit of around € 50 billion by selling unused allowances between 2008 and 2019.

This fixes Cbam. When foreign industry also has to pay a carbon tax, there is no reason for European industry to flee abroad. So now the EU can withdraw the free quotas. Yes, the EU MUST actually pull them in. Otherwise, the only foreign industry pays for emissions and then we break the world trade rules.

Good for the climate improves competition for European industry and a new source of revenue for EU countries.

German industry enters the German industry again. They want to keep their free rights for at least another ten years. They also want export subsidies from the EU. They have not yet had time to adapt to the climate and now it is extra difficult with the Ukraine war, says German industry.

This is the same German industry that with the help of EU free quotas and a flow of cheap Russian gas has been able to set new world records in exports year after year since 2005. We note that Swedish SSAB (which also earned billions on free emission rights) has spent time developing fossil-free steel .

The German government is (again) supporting its industry when Cbam is currently being negotiated in the EU. German CDU members, accustomed to dominating the European Parliament, support German industry so intensely that a haunting compromise has just been overturned.

Germany’s constant footing on the brakes in the EU is starting to become a serious problem for all of us.


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