Climate change yes - but who should pay for it?

Climate Change: Who's Footing the Bill? - German Perspective

A majority of Germans acknowledge that climate change poses a significant threat, as indicated by a survey conducted by the Bertelsmann Foundation. The survey revealed that 54% of respondents are "very concerned" or "extremely concerned" about climate change, with another 33% expressing "some concern." Yet, while the need for restructuring the economy, energy production, and transportation is widely recognized, there's a growing concern regarding the distribution of associated costs.

In fact, the study revealed that 76% of Germans consider the energy transition expensive. A majority (55%) believe that the energy and transport transition could jeopardize social cohesion. Germans perceive the distribution of benefits and costs between various groups - high and low earners, companies, and consumers, as well as urban and rural populations - as particularly unfair.

Fairness in Climate Action

As the German government and policymakers embark on developing sustainable climate change mitigation strategies, it's crucial to ensure that the transition to renewable energies and climate change adaptation is fair to all. Ensuring that various stakeholders contribute their share to the transition is crucial.

National Governments should set clear objectives, ensure regulatory alignment, and manage climate risks in public-private partnerships. Subnational Entities and private infrastructure owners need to share financial burdens, while beneficiaries of climate adaptation measures contribute based on their ability.

Policies to address fair distribution of costs include strategic planning, regulatory alignment, public finance and investment strategies, insurance and risk transfer frameworks, and a harmonized EU-wide approach.

Transitioning to a Greener Future

To achieve a fair and sustainable transition, policymakers should prioritize clear adaptation objectives and engage key ministries to ensure policy coherence. They should assess the economic impacts of climate change, strengthen sector-specific frameworks, and integrate climate resilience benefits into budgeting, procurement, and project appraisals.

Finally, addressing concerns about social cohesion and fair distribution of costs requires implementing innovative approaches like parametric insurance and sector-specific support mechanisms, as well as sector-specific climate transition plans to meet EU sustainability targets.