Setting the right prices for effective climate protection

In its edition of February 19, 2018, Handelsblatt reports that Germany’s largest companies are advocating that CO2 emissions should be subjected to a better and more comprehensive pricing mechanism.

Pricing expert Prof. Hans-Christian-Riekhof sees this as a remarkable initiative. “One would actually expect proposals to be made by the state on how to properly tax or price emissions. But this presupposes that the authorities are dealing with the creation of effective emissions markets. And by the way, agriculture as well as the transport and heat sectors should also be included in such markets,” says Riekhof.

The determination of appropriate prices lies with the markets

“It is one of the economic truisms that markets are a pretty efficient mechanism for determining appropriate prices. Monitoring the functionality of these markets is more a task for authorities. If market participants are now calling for the creation of more efficient markets, this call should not go unheard.”