German climate plans on ice over tax dispute

Germany's upper house of parliament on Friday blocked parts of the government's climate package aimed at reducing greenhouse gas emissions.

Lawmakers in the Bundesrat — which represents the governments of Germany's 16 federal states — paved the way for most of the measures to enter into force, but unanimously voted to send parts of it related to taxes and subsidies to a mediation committee between the upper house and lower house, or Bundestag.

Read more: German parliament approves climate protection plan

What was the problem?

The dispute largely centers on cost sharing between the federal and state governments. 

The states argue they will bear the costs of lowering taxes on long-distance trains, tax benefits for energy-saving home renovations and an increase in the commuters allowance, while the federal government will reap the financial benefits of a carbon-pricing program. 

Read more: Trains vs. planes: What's the real cost of travel?

What did pass?

In all, the Bundesrat voted on four climate-related bills. The climate protection law, an increase in aviation tax and introduction of an initial CO2 price of €10 ($11) per ton were all approved.  

The climate protection act makes it a legal obligation for Germany to cut greenhouse gas emissions 55% by 2030, compared to 1990 levels. 

Lawmakers hope the mediation committee between the two chambers of parliament can reach a consensus before Christmas, a goal some state representatives find overly ambitious or improbable. 

cw/rt (AFP, dpa, epd, Reuters)

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