Economist Michael Hüther sharply criticized German Chancellor Friedrich Merz’s recent doubts about CO₂ pricing.
“Harnessing CO₂ prices through a market‑based trading system is the most rational approach to climate protection” Hüther explained to the New Osnabrücker Zeitung. “It is cost‑efficient and sends the necessary signals to companies”. He added that the current back‑off movements are troubling. “It is unclear where the policy is headed, and the resulting uncertainty is problematic because firms rely on stable expectations”.
Merz, speaking at an EU economic summit in Antwerp a few days earlier, hinted at a possible shift away from the existing emissions‑trading scheme. He said that if the mechanism proves ineffective, “we should be very open to a revision or at least a shift”. The statement sent ripples through the emissions‑market community, sparking concern among traders and policymakers.
Hüther warned that such uncertainty could lead to “expanded doubts” and that abandoning the trading system would be “unwise”. He stressed the need to keep developing the emissions market in line with the EU goal of becoming largely greenhouse‑gas neutral by mid‑century. “If we deviate from this instrument, we will face a climate‑policy disaster” he cautioned.
Environment Minister Karsten Schneider (SPD) has recently called for extending the phase during which companies receive free pollution certificates. Hüther notes that this proposal is worth considering. “A longer allocation of free certificates to polluting firms does not fundamentally undermine the emissions‑trading system and could make sense” he said.
