Saving billions by reducing subsidies for sustainable economic growth.

Saving billions by reducing subsidies for sustainable economic growth.

According to a report by www.infosperber.ch,

Since the German Federal Court of Justice put an end to the government's debt cheating, the traffic light coalition has been trying to figure out how to plug the $60 billion hole. It doesn't have to come at the expense of restructuring Deutsche Bahn or digitalization or social benefits. It would be enough to abolish all subsidies for activities that damage the climate and the environment. Tax relief or tax privileges are subsidies by another name. Abolishing them would bring savings of around 65 billion euros. The reduction of subsidies would have to be consistent but gradual. The 65 billion could therefore not be saved in one fell swoop, but at least in the medium term.

The savings potential of 65 billion euros, as proposed by the Federal Environment Agency and the Ecological-Social Market Economy Forum, would have a significant impact on the market and the financial sector. By abolishing subsidies for climate and environmentally damaging activities such as air and car traffic, agriculture or construction, drastic changes could occur in the financial sector. This could lead to a shift in investments towards renewable energy and green technologies, which would have a positive impact on sustainability and environmental protection.

The climate-damaging subsidies and tax relief include, in particular, 25.4 billion euros in the provision and use of energy, 30.8 billion euros in transport, 3.0 billion in construction and housing, and 6.2 billion in agriculture and fishing.

These savings could have positive social impacts by using the freed-up funds for specific support programs or to generally relieve the burden on low-income households. With such financing, environmental protection measures could be strengthened and social hardship avoided.

The conclusion of the Federal Environment Agency emphasizes that the reduction of environmentally harmful subsidies can be associated with positive distributional effects. There is an opportunity to combine environmental and climate protection with social justice.

Anton Gunzinger's suggestion in Switzerland to advocate true costs for fossil and nuclear energy sources would also lead to drastic changes in the energy market. A tax-neutral CO2 levy could make renewable energies competitive and enable solar power to be profitable without subsidies.

A controversial discussion could also trigger the introduction of a micro-tax on all electronic money flows in order to shift the tax burden from the real economy to the financial economy and achieve social effects.

Overall, the discussion about abolishing subsidies for climate and environmentally damaging activities shows that financial measures can have a strong impact on the economy and society. The financial sector may have to prepare for fundamental changes if such a policy is implemented.