Energy Prices: Government Increases Commuter Allowance

In view of rising fuel and energy prices, the federal government, under pressure from the FDP and SPD, has retroactively increased the long-distance commuter allowance by three cents to 38 cents per kilometer as of January 1, effective from the 21st kilometer. This increase was initially targeted by the previous government for 2024 to offset the rising CO2 price on fuel. The Union, now in opposition, had also recently called for this step. Thus, the Greens are yielding to the pressure from the FDP and SPD.

"For us, it was clear that short-term support for people in rural areas must also be a focus," said the new Green Party leader Ricarda Lang.

At the same time, it is clear that the commuter allowance does not have a social impact if "the doctor in Potsdam benefits more than the bus driver in Barnim," Lang criticized. The Green Finance Minister Danyal Bayaz from Baden-Württemberg also expressed self-criticism: the increase in the commuter allowance was not necessary, "also because it sends the completely wrong ecological signal."

However, they want to see in the medium term, Lang continued, "how we can overall make funding in this area more social and ecological." This is also included in the three-page results paper of the traffic light coalition on the relief measures decided in the 10-point package, which, in addition to the increase in the commuter allowance, also includes the abolition of the EEG levy as of July 1, 2022, or the increase in the basic tax allowance.

"It is important to us that life remains affordable in its basic needs," said SPD leader Saskia Esken.

According to the SPD, this apparently also includes commuting by car, whose tax support mainly benefits the middle and upper class, according to experts. Tax reliefs in this area amount to 2.9 billion euros, while the abolition of the EEG levy benefits low-income earners more, for whom the similar energy costs across all strata account for a higher percentage.

Sustainability highly questionable

Socially, the measures could have a positive impact, but ecologically less so. The Greens, who campaigned heavily for the reduction of climate-damaging subsidies such as the commuter allowance, the diesel and company car privilege, can now at most claim to have prevented worse. As a leaked draft from the negotiation round shows, the coalition committee originally wanted to increase the commuter allowance from the 21st kilometer to 45 cents and below from 30 to 40 cents, apparently proposals from the SPD and FDP.

Recently, the Berlin think tank Agora Verkehrswende found in a study that commuting predominantly conducted by private car massively drives emissions. The distance allowance contributes to employees being more inclined to accept long commutes and to travel them by car, the conclusion reads.

Energy money must come

Instead, the think tank proposed a mobility allowance, which the Greens had similarly promoted as energy money during the campaign, but which is only found as "climate money" hidden in the coalition agreement. The mobility allowance is directly deducted from the tax liability, so the tax relief per kilometer of commute would be the same for everyone, Agora advocates. Moreover, high payouts directly reward those who consume less energy. The think tank had previously pointed out in an analysis the social imbalance of the German funding framework of the climate protection program of the previous government, which favors commuting higher earners.

Consumer advocates nevertheless expect that the coalition will have to make adjustments in the spring in view of rising energy prices. Udo Sieverding, energy expert at Consumer Center NRW, described the government's ten-point plan to the Süddeutsche Zeitung as a "drop in the ocean" and believes that additional costs will far exceed the reliefs. "Then it will be time for energy money," Sieverding believes. The German Nature Conservation Ring also considers this to be fairer - and more ecological:

"Increasing the commuter allowance fuels fossil inflation," criticized Kai Niebert, president of the environmental association in the SZ.

What does that mean?

Unfortunately, it must be said: The new government is currently continuing where the old one left off: whenever it starts to get difficult, the traffic light jumps first to yellow, then to red, but not to green. In other words, taking the path of least resistance. Which is ultimately not surprising, because when it comes to climate protection, the SPD as a coalition partner in the black-red alliance was certainly not a driver - or could at most be described as "progressive" in relation to the braking Union. Now it is complemented by an FDP that is at best verbally open to climate protection but apparently successfully torpedoes all efforts by the Greens whenever it gets specific.

Parts of the government still give the impression that there is a choice in the measures. There is not. It takes the complete toolbox to achieve the traffic turnaround and contain the climate crisis, from speed limits and subsidy cuts (immediately) to car and city tolls and emissions trading (soon). "We don't want" is not an option. "We must" is. And then that "MUST" must be explained.

The next disappointment

After the rejection of a more ambitious position on the fleet limits in the EU by FDP Transport Minister Wissing and with the approval of Chancellor Scholz, the interim extension of the ambivalent and apparently also abusively used e-car subsidy focused on mid-range cars and PHEVs is the next disappointment for everyone who expected the traffic light to finally take serious action to achieve climate goals.

At least this is supposed to change from 2023 with an envisaged new regulation of the funding - and proof of a "positive climate protection contribution" becoming obligatory. By the way, in the field of construction, "quantity over quality" also applies and the SPD pushes through its focus, although we long since also need a construction turnaround - away from the stylization of the detached house in the countryside or the chic but unfortunately CO2-intensive new building towards climate-friendly preservation and renovation.

Of course, the energy crisis is acute, prices are rising, and the current government is being caught up by the energy policy naivety and energy transition blockade of the previous government. But when will the announced projects be placed under the climate reservations of the new climate and economics minister Habeck?

"Mid-term," as the Greens say, is no longer enough. And for socially just compensation, the much-touted climate money could have led to that too. The concepts for this should have been in place long ago. Now they are trying again with the usual means to calm the spirits. Ignoring the fact that the commuter allowance "broadly speaking" benefits higher earners who can afford to drive a car and less the much-cited nurse, for whom city living (also a failure of the black-red) is unfortunately too expensive.

In view of the escalation in Ukraine, the oil price will not stabilize quickly. And we continue to lose time in the fight that should actually most preoccupy all warlike potentates of this world instead of the mad struggle against their own neighbors and over territories: the fight against the climate crisis. We're in the 21st century, not the 19th. The challenge lies elsewhere. Why is that so hard to convey?