Ottmar Edenhofer: carbon price helps to renew Social Market Economy

The currently discussed comprehensive pricing of the greenhouse gas carbon dioxide (CO₂) can become the core of an ecological financial reform – which is indispensable to ensure the acceptance of the market economy in Germany. This is what Ottmar Edenhofer and Linus Mattauch explain in the book "Soziale Marktwirtschaft ökologisch erneuern" ("Renewing the Social Market Economy ecologically"). Edenhofer is Director of the Berlin Climate Research Institute MCC (Mercator Research Institute on Global Commons and Climate Change), Mattauch used to be a scientist at the MCC and now teaches at Oxford University in England. The anthology was presented today by the CDU leader Annegret Kramp Karrenbauer.

The 300-page book, which contains 20 contributions and takes a look at future development of German social and economic order, is the result of an unusual cooperation: it is published by Ralf Fücks, managing director of the Berlin think tank Zentrum Liberale Moderne and for many years executive committee of German Green party’s foundation, and Thomas Köhler, Head of Politics and Consulting of the CDU related foundation Konrad Adenauer Stiftung.

The book (in German) can now be ordered free of charge from their website here.

An ambitious reform of tax system and financial policy, Edenhofer and Mattauch argue in their book contribution, could master a threefold challenge: first, decarbonizing the economy, second, promoting economic growth, and third, reducing inequality and thus strengthening democratic institutions. "A tax relief for citizens with low incomes through the revenues from carbon pricing is possible", the authors emphasise. "They would then even be better off financially through climate policy reforms.”