Sometimes, no news is good news. In a week in which Obama gave US states the ability to enforce tough new standards on car fuel efficiency and emissions, German policymakers managed a last minute turnaround to prevent doing the opposite. The audacity of claiming a shift to environmentally friendly car taxation, while preparing a tax model that would have more than halved taxation for the worst polluting SUVs, was breathtaking. Luckily some in Germany’s governing coalition, namely Sigmar Gabriel, minister for the environment, and Wolfgang Tiefensee, minister for transport, both SPD, must realised the impact this would have with voters, both those interested in climate change and those who questioned why they had to pay the same, while those driving 500hp SUV got a hefty discount. In the end a compromise was found, whose central characteristic is that it will mean every kind of car essentially paying what it is paying now. This was criticised by the LINKE party and environmental NGOs as a ‘wrong signal’ because it did not in fact raise taxation for more polluting vehicles. Yet, one could be forgiven, given recent experience with Germany’s Grand Coalition to give a sign of relief at the fact that things haven’t become even worse.

On a related note, this week brought out a few other interesting bits of information. DEKRA, an car testing association published a report showing that 92 percent of drivers are willing to change to an ‘Umweltauto’, even if it means a smaller range, worse driving performance, or shorter service intervals. Unfortunately, they didn’t ask how much more people were willing to pay…

Another report, this time written by Roland Berger, a consultancy, for the government of the state of Saxony, shows the economic potential of environmental technology. This industry grew by 17 percent in 2007, employs 18.000 people in Saxony alone, and already contributes 6 percent to the states GDP. And, encouragingly, even in the current economic climate the outlook of the companies asked remained positive. Adding to the good news, for the economy and the climate, was the association of energy and water utilities BDEW, stating that renewable energy covered more than 15 percent of total German electricity consumption. This means Germany is already fulfilling the EU renewable energy targets, and, given that much of the technology is produced in Germany, highlights the positive economic impacts courageous action on climate change can have.

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