Market Based Instruments

Market Based Instruments

National Experiences in Environmental Sustainability

Critical Issues in Environmental Taxation series

Edited by Larry Kreiser, David Duff, Janet E. Milne and Hope Ashiabor

This detailed book explores how market based environmental strategies are used in various countries around the world. It investigates how successful sustainability strategies used by one country can be transferred and used successfully in other countries, with a minimum of new research and experimentation. Leading environmental taxation scholars discuss this question and analyse a set of key case studies.

Chapter 2: Monetary instruments to promote technological innovation – the German Renewable Energy Act

Monika Böhm

Subjects: economics and finance, environmental economics, public finance, environment, environmental economics, environmental law, law - academic, environmental law, tax law and fiscal policy


The German Federal Ministry of the Environment (BMU) has strongly promoted the increased use of renewable energy. In 2011 the Ministry’s Advisory Council on the Environment published a report featuring an ambitious goal: the development of an electricity supply based 100 percent on renewable energy by 2050. The Federal Government’s targets are not quite as ambitious but remain far-reaching nonetheless. It presented a comprehensive energy concept in 2010, the core of which was the continuous development of renewable energy sources in the electricity sector, in addition to a reduction in consumption. Thirty-five per cent of the electricity required is to be generated from renewable energy by 2020. In 2030 that proportion is to be 50 per cent, rising to 65 per cent in 2040, and on to at least 80 per cent by 2050.CO2 emissions are to be simultaneously reduced by 40 per cent over 1990 economy-wide levels by the year 2020, while a reduction of at least 80 per cent is to be achieved by 2050. More ambitious targets are also being demanded for Europe. In 2010 the EU declared that its aim was to get 20 per cent of its energy from renewable resources by 2020, but this may prove to be insufficient – if it is even achieved at all.

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