Before the federal government begins deliberations on potential relief measures stemming from high fuel prices, economic expert Monika Schnitzer has issued warnings against price interventions, instead advocating for the introduction of a climate dividend. Speaking in the “Neue Osnabrücker Zeitung” (Saturday edition), she stated, “It would be incorrect to provide blanket relief to everyone right now. This is a crisis that happens periodically. Most people can manage these higher fuel prices”.
For only a small percentage of people are the increased costs a threat to their existence. According to Schnitzer, society needs to move away from the notion that the state always has to cushion the blow for everyone, arguing that assistance should be directed only to those who genuinely need it.
She expressed skepticism regarding the current proposals for relief, specifically criticizing any intervention in prices. “What is particularly wrong is intervening in prices because people are intended to drive less or at least drive slower. Oil is scarce, and we must reduce consumption” the economist explained.
However, Schnitzer believes the timing is right for implementing the climate dividend, a measure long discussed in policy circles. She suggested, “What could be done-and what was already demanded when the CO2 levy was introduced-is to implement a climate dividend and return the CO2-levy revenue to the citizens”. She noted that the technical prerequisites for this are now in place. For instance, “This could result in a flat sum paid to everyone; everyone would receive the same amount. This would particularly help the poorer segments” Schnitzer commented.
Furthermore, she suggested that a reduction in the electricity tax for everyone would also be beneficial, suggesting the government eliminate “measures that have little effect on growth”.
Schnitzer also called for utilizing the current oil crisis to gain independence from fossil energy sources. “We have been experiencing crises in the Middle East for decades, each one affecting the energy supply. If we were more advanced in expanding renewable energy and electric mobility, we would not be so vulnerable right now” she said, adding, “Anyone driving an electric car now has a clear advantage”.
Overall, despite the agreed-upon ceasefire between Iran and the United States, the economic expert anticipates negative effects for the German economy. “Even if hostilities end promptly, it will take time to return to normal conditions and supply chains. The Strait of Hormuz must be cleared and secured. There is damage to production facilities. Current estimates suggest it will take four months for shipping traffic to normalize” Schnitzer concluded. “As a result, we will experience significant losses in growth”.
