Relief: Study advises heating cost subsidy instead of gas price cap

There is still no clarity about the federal government's third package of measures to relieve citizens of the high energy prices.

Relief: Study advises heating cost subsidy instead of gas price cap

There is still no clarity about the federal government's third package of measures to relieve citizens of the high energy prices.

A scientific study now recommends how the high costs can be cushioned without polluting the environment: A heating subsidy for housing benefit recipients and a 29-euro ticket for local public transport are suitable. The study by DIW Econ on behalf of the 140-member Climate Alliance advises against a gas price cap for basic needs. This provides no incentive to save energy. Rising gas prices could also exponentially increase government costs for this measure.

The study, which is to be presented today in an online press conference, was available to the German Press Agency. DIW Econ, a subsidiary of the German Institute for Economic Research (DIW), had examined several possible measures with regard to their social and ecological effects with a view to the relief package announced by the federal government.

Due to the sharp rise in prices for energy and many consumer goods, the traffic light coalition has already decided on several relief steps, some of which have already been implemented. The federal government is currently working on a third package of measures. The leaders of the SPD, FDP and Greens will probably try to bring about a decision at a meeting of the coalition committee at the weekend. Chancellor Olaf Scholz said on Wednesday that the goal was "a very precise, very tailor-made relief package".

According to the study by DIW Econ, flat-rate payments such as a heating subsidy for housing benefit recipients remain an incentive to reduce their own energy consumption. A monthly ticket for buses and trains for 29 euros also means financial relief for many people and can persuade drivers to switch to climate-friendly public transport. In addition, the study proposes reducing VAT on plant-based foods and increasing the tax burden on polluting foods such as meat.

The factions of several parties in the Bundestag are also discussing energy policy and rising prices. While the Green factions are finishing their retreat in Potsdam on Thursday, the SPD faction and the leaders of the Union faction are coming together for retreats.

The SPD parliamentary group leader had proposed relieving citizens with direct payments, a price brake for basic energy requirements and a nationwide 49-euro ticket for local and regional public transport. Against the background of the drastically increased energy prices, the Union MPs invited the CEO of Germany's largest energy supplier Eon, Leonhard Birnbaum, to the consultations on Thursday.

"This war has economic and social consequences that will keep us busy for a long time," said Federal Labor Minister Hubertus Heil on Thursday night on the ZDF program "Markus Lanz". "The state (...) cannot cushion everything for everyone, but it has to do it in a targeted manner." The state also had to “do other things” with its resources: One had to be prepared for the fact that short-time work would have to be rolled out again, as in the corona pandemic, “if the whole thing should escalate economically,” said Heil. "The tasks will still be huge."

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