DThe traffic light caps gas prices. The large protective shield against the explosion in energy prices, the “double boom”, as Olaf Scholz called it: it is worth a proud 200 billion euros to the federal government – that is almost half of the entire German budget. This weekend, the government’s Gas Commission is making a plan to hopefully keep people from freezing in the winter.
The gas price cap is correct – now it is important that it becomes good. To put it bluntly, it is good that the government is intervening in the energy crisis. Whether retirees, students, families or single parents: they are all worried about how they will heat their homes in the coming months. Providing millions of people with the necessary minimum of affordable gas with a gas price cap prevents poverty and strengthens social cohesion.
A huge task – and a huge opportunity
The commission of experts is facing a huge task: it has to make the basic needs of 20 million households that heat with gas affordable. So that people use less energy even with the gas price cap, the savings incentives must not fall behind. And it must protect the industry and the small businesses – the bakers, cleaning companies and craftsmen who use a lot of gas – from bankruptcy.
The billion-dollar “double boom” is also a great opportunity: If we spend so much money, we have to seize the opportunity to convert our energy supply to be secure and climate-neutral in the medium term. Russia’s war of aggression in Ukraine and the hot summer have made it clearer than ever that the energy policy of the past few decades, with mass imports of cheap, climate-damaging natural gas from Russia, was a mistake.
According to calculations by the Hans Böckler Foundation, the state would have to spend up to 36 billion euros per year on the gas price cap for private households, plus money for industry. But despite the high costs, part of the 200 billion could remain. In order for the gas price cap to have a long-term effect, part of the money must be used to quickly convert the energy system. Climate funds, photovoltaics and heat pumps: the Commission should ensure that some of the 200 billion flow into renewable energies.
Heat pumps instead of gas heaters
Heat pumps instead of gas heaters, heating without gas: Germany has to convert buildings for this. It now needs the opportunity to get rid of old gas heaters. They can replace heat pumps and photovoltaic systems on the roofs and new insulation can reduce energy consumption. If people heat with electricity and the sun, they will no longer be dependent on the state paying part of their gas bills.
A scrapping premium for old gas heaters, a subsidy pot for millions of new heat pumps and an investment program for building renovations: if the Commission provides money for this, the 200 billion will reduce our costs far beyond the validity of the gas price cap.
With climate concepts to a green business location
Whether steel production or the paper industry: companies consume more than half of the natural gas that Germany is currently buying at exorbitant prices. In the short term, the cap is important to prevent insolvencies. But the industry will change. Companies can only remain competitive and climate-friendly if they rely on sustainable production. Instead of wasting expensive and climate-damaging gas, processes must be electrified with renewable technologies.
The companies that consume a lot – and that benefit from the gas price cap in particular – should present binding climate concepts so that the state can step in. In this way, they make their contribution to the necessary transformation into a climate-neutral and sustainable business location. At the same time, part of the 200 billion could flow into a climate protection fund that also allows small businesses to convert to CO2-free technologies enabled.
Specifications for industry, investment programs for private households: If the Commission proposes sensible measures for renewable energy generation, then the gas price cap can be good. Step by step, such measures also help that fewer and fewer consumers and companies are dependent on the expensive “double boom”.
It was only two weeks ago that more than 280,000 people across Germany took to the streets against fossil fuels and for fair climate protection during the Fridays for Future climate strike.
The traffic light is faced with the task of ensuring that the gas price cap is an investment in the future. For this, money must urgently flow from the 200 billion into climate measures in order to end the climate-damaging energy supply. This will be used to measure the success and benefit of the “double boom”.
Niklas Höhne heads the NewClimate Institute and is a professor at Wageningen University. Carla Reemtsma is spokeswoman for Fridays for Future.