Will EU climate policy cripple German business?

German Environment Minister Matthias Machnig and chambers of commerce boss Martin Wansleben have an interesting exchange which highlights the sharp divisions opening up towards the EU climate change plans in Europe's biggest emitter and industrial powerhouse.

Both the heavy industry and green lobbies in Germany are powerful, and the outcome of their rivalry will have a decisive effect on negotiations over the EU's climate package, with profound implications for the rest of Europe.

Machnig: We want emissions certificates in the energy sector to be auctioned 100%.

Wansleben: That’s fatal! It will lead to higher electricity costs for everyone. Business and consumers will never accept that.. It is inefficient and too expensive for Germany as a business location… We must set in motion policy that also incorporates large-scale emitters such as the USA, India and China.

M: Of course we want a global emissions trading system..the industrial countries will have to take the first steps. Our industry will have the advantage of becoming more competitive.

W: You’re mistaken. Many companies here in Germany will not survive that.