The emission of carbon dioxide (CO2) will also have a price in Austria from January 2022. How exactly this should look is not yet known. The aim of a price for emissions is to provide incentives for environmentally friendly behavior.
From January 2022, CO2 emissions in Austria should cost something. ÖVP and Greens are likely to introduce either CO2 taxes or a national emissions trading scheme. The aim of both models is to increase the price for greenhouse gas emissions and thus to create incentives for environmentally friendly behavior by companies and households.
Maximum permitted amount of greenhouse gas emissions specified
An emissions trading system works in such a way that the maximum amount of greenhouse gases may die, may be emitted in a period of time, is determined in advance. This amount is then awarded to companies in the form of certificates. If you emit less than you are allowed to, you can sell your remaining certificates to another company or take them with you in the next period. Those who emit more have to buy additional certificates. The price per ton of greenhouse gas emitted is determined by the supply and demand of emission certificates. The number of certificates issued, and thus the maximum amount of emissions, is reduced in each period. The leading the Oxford Institute for Energy Studies in a recent study.
CO2 tax: price per tonne of greenhouse gas emitted
In the case of a CO2 tax, on the other hand, the price per tonne of emitted is fixed and the amount of emissions can only be influenced indirectly. The CO2 tax is incurred, for example, when buying fuel, heating oil or other emission-intensive materials. As a rule, CO2 pricing not only covers carbon dioxide (CO2), but also other gases, these are referred to as CO2 equivalents.
Difference in political enforceability
There is also a difference between the models in terms of their political enforceability. In an emissions trading system, the amount of greenhouse gases emitted is continuously reduced. In order to achieve the same effect with a CO2 tax, you have to keep increasing taxes, but: “Politically, tax increases are not an easy exercise,” a spokesman for the Austrian Energy Association asked the APA. Setting up a functioning emissions trading system is also not easy: “You have to build the system in such a way that speculation is not possible.” The price also has to be right, “too low a price has no steering effect, too high a price leads to massively increased production costs and to discussions about the location”.
EU emissions trading largest trading under the Chinese system
In the EU there is currently both emissions trading and CO2 taxes. The European Emissions Trading System (EU-ETS, EU Emissions Trading System) was introduced in 2005 as one of the first large of its kind. It is valid in all EU countries as well as in Iceland, Liechtenstein and Norway. The system includes around 10,000 systems in the electricity sector and the processing industry as well as flights between the participating countries. It covers around 40 percent of the EU’s greenhouse gas emissions and thus less than five percent of global emissions. Nevertheless, the EU-ETS is the largest so far, it WILL only be overtaken by the Chinese system as soon as it is fully functional.
National system in Germany from 2021
Great Britain left the EU ETS with Brexit and introduced national emissions trading. There has also been a national system in Germany since 2021. It covers those emissions that occur when fuels are burned in traffic and during heating and that die are not recorded in the EU ETS.
Some EU member states are already taxing CO2 emissions
In addition to the EU ETS, some EU member states have taxes on greenhouse gas emissions. Finland and Poland were the first countries to introduce these taxes in 1990, according to the World Bank. The amount of taxes and the emissions covered vary greatly from country to country: In Latvia you pay around 10 euros per tonne of CO2 equivalent, in Sweden it is around 120 euros, Poland and Ukraine only charge 9 and 37 cents respectively. In Austria, too, there should be CO2 pricing from 2022, also for sectors that are not covered by the EU ETS. The Netherlands have introduced a CO2 tax, die for ensuring that the national price per emission ton is at least higher than the price in the EU ETS.