In early May, the parliamentary groups of the German Bundestag were in agreement: Tenants and landlord should evenly split the costs of the carbon levy in houses heated with fuel oil or natural gas. That consensus is ancient history now. While Social Democrats and Greens emphasised the need to ease the load for tenants, the Christian Democrats were worried that investments would dry up. On the night of 21 June, word got out: The compromise flopped, because the Christian Democrat parliamentary group rejected the distribution arrangement. It believes that the costs for the carbon output should solely be borne by tenants.

The May Agreement

The carbon levy is part of the schedule of actions toward climate change mitigation, and had previously received praise from the Federal Ministry for the Environment. After all, tenants should not be made responsible for the heating technology used in a given building, as the Ministries for the Environment, for Finance, and for Justice argued, all headed by Social Democrats. Burdening tenants with these costs is therefore not helpful, they believe. The goal they championed instead was to create incentives for climate-friendly refurbishment investments by bringing landlords aboard.

Conversely, Christian Democrats had argued that landlords should not be made to pay for the personal heating habits of their tenants. The divergence in opinion was precisely the reason why the parties had agreed to a compromise in early May that involved an indiscriminate distribution. Heating costs would be evenly split between tenants and landlord, regardless of the energy consumption.

The Current Situation

Originally, it had been planned that the federal cabinet would approve the proposal on 2 July. However, certain members of the Christian Democrat parliamentary group had already announced their intention to reject the proposal anyway. As reason they cited the demand that costs should be borne exclusively by those who caused them. In their eyes, an even split would violate the polluter-pays principle because the landlord is not the polluter.(www.luczak-berlin.de) According to the current legal position, landlords are therefore at liberty to recover these costs in full from their tenants. For the time being, the surcharge is supposed to be 25 euros per ton of CO2. Yet the certificate price is to be successively raised to a fixed rate of 55 euros by 2025. The trouble with this arrangement is that it creates no incentives for landlords to invest in more energy-efficient heating systems. By contrast, Axel Gedaschko, the President of the GdW Federal Association of German Housing and Real Estate Companies, which is one of the leading professional associations of the German real estate industry, has proposed a differentiated distribution of the costs. (www.gdw.de) It suggests that the cost apportionment should depend on the energy consumption of a given house. The greater the rate of consumption, the higher the share to be borne by the landlord. Gedaschko argues this would create an incentive to invest while sparing tenants the brunt of the costs.

Sources: Wohnungswirtschaft zur Verteilung der CO2-Kosten | Die Wohnungswirtschaft Deutschland (www.gdw.de) CO2-Preis: Vermieter sollen jetzt doch nichts zahlen | Immobilien | Haufe (www.haufe.de)