Germany’s Green Party Calls for 15 Euro a Ton Carbon Price Floor

Germany’s opposition Green party seeks to introduce a minimum national price for carbon emissions that is triple the current price in Europe should they win federal elections on Sept. 22.

The party aims to set a minimum price of 15 euros a metric ton in Germany and then raise it gradually to create incentives to close inefficient coal plants, Jens Kendzia, a party spokesman, said today by phone from Berlin. EU carbon permits for December jumped as much as 3.9 percent to 4.59 euros a ton on the ICE Futures Europe exchange today.

German power production from coal, which emits about twice as much as carbon as natural gas in electricity generation, rose 7 percent in the first seven months of the year while gas-fired output dropped 19 percent, data from the Fraunhofer Institute for Solar Energy Systems show. The Greens’ announcement comes as the 28-nation European Union considers an overhaul of its 53-billion euro emissions market after prices dropped to a record low 2.46 euros a ton in April.

“We see potential to introduce it with several partner countries in the European Union,” Kendzia said.

The European cap-and-trade program imposes pollution limits on about 12,000 manufacturing companies and utilities in the region, including Germany’s largest utility EON SE and steelmaker ArcelorMittal. The system, in which caps were set before the economic crisis, doesn’t allow any price floors or ceilings. The current level of pollution cost is too low to encourage investment in clean technologies, according to the EU’s regulatory arm.

‘Lagging Behind’

“The European emission trading system is lagging behind expectations so far when it comes to its contribution to climate protection,” the Greens said in their election program published in June.

The Greens will challenge Angela Merkel’s ruling coalition of the Christian Union and Liberal Democrats in the Sept. 22 elections and may enter a coalition with the Social Democratic Party to gain a majority. The Greens got 11 percent of votes in the Germany Stern-RTL weekly election poll, published today. The Social Democrats got 23 percent. The Christian Union received 40 percent, while 5 percent of voters opted for the Liberal Democrats.

To contact the reporter on this story: Julia Mengewein in Frankfurt at jmengewein@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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