The German government has agreed on a legislative package that aims to significantly reduce the country's carbon dioxide footprint.

Since German Chancellor Angela Merkel in early 2007 persuaded her EU colleagues to agree to a set of ambitious and binding climate protection targets, not much has happened on Germany's domestic global warming front. Critics have accused Merkel of double standards, arguing she promotes climate protection at the global level while protecting industry interests at home.

In a bid to silence those critics, the German government last week agreed to what Environment Minister Sigmar Gabriel called the world's biggest climate protection package, which will reduce carbon dioxide emissions by up to 36 percent by 2020, compared to 1990 levels.

Initial targets had been 40 percent, but Gabriel was nevertheless pleased.

"It's still a massive step forward," he said. "We want to show that economic growth is compatible with climate protection. ... What we've done in Germany will take us well beyond (the 1997 international) Kyoto (Protocol), and we'd like to see other countries start, at the very least, to meet their own Kyoto targets."

The targets, however, carry a hefty price tag: German taxpayers will have to pay some $492 billion over the next 12 years to help finance the measures agreed upon by the German government.

They include house efficiency stipulations, increased taxation for dirty trucks and the expansion of Germany's high-voltage transmission grid to make it fit for more electricity from wind energy.

Claudia Kemfert, chief energy expert at the Germany Institute for Economic Affairs, over the past months has criticized the German government for lagging behind when it comes to climate protection. She said she was pleased with the new package.

"This is a good start, and I see this positively because Germany will be able to save energy cost-efficiently," she told German news channel n-tv. "And with today's high prices for oil and gas, saving energy means saving cash."

Germans over the past two years had to cope with rising energy bills, with prices for electricity and heating oil shooting up between 30 percent and 50 percent. Several large natural gas providers recently announced prices would be adjusted upward once again within the next five months.

High energy prices already will bring people to be more energy-efficient, but Berlin is determined to further spur that development: Apartment buildings and houses built after Jan. 1, 2009, will have to be 30 percent more energy-efficient, the package stipulates, adding that renovations of older buildings also will have to include efficiency measures.

Transportation still owns the lion's share of carbon dioxide emissions, and that's why Berlin wants to raise the toll for dirty trucks. Heavy trucks emitting lots of pollutants will have to pay double the toll that the cleanest vehicles pay. Berlin that way also hopes to move the bulk of commercial transport from roads to train tracks and waterways.

Germany has committed to meet 30 percent of its energy needs with renewable sources, and that's why the country desperately needs an update of its aging electricity grids. Wind is to become the dominant renewable source in Germany, but it is a strain on grids because of its unstable electricity production.

Not everyone is happy with the new package, however.

A dispute between Gabriel and Economy Minister Michael Glos over the amount dirty cars will be taxed was not resolved, with a decision now being delayed until 2010.

Observers nevertheless hope that by starting early and ambitiously with climate protection, Germany may develop an expertise that it can export all over the world.

"Climate protection is the market of the future," Kemfert said. "All companies that invest in this sector today will benefit in the future."