This is a very clear and concise description most people will understand and can act accordingly. You don’t need more. /END
CC Isabella M. Weber Sebastian Dullien Veronika Grimm Danyal Bayaz Karsten Neuhoff @fuestClemens Jens Suedekum @claudia_sahm Gustav A. Horn Cansel Kiziltepe Tom Krebs

“An amount of gas – 80 % of consumption - will be subsidised so as to cost no more than 12 Cent/kWh. You get to keep the whole rebate even if you bring down consumption to less than 80 %.” 15/

Btw if people wonder how to describe the scheme in better and less distorting words: Martin Sandbu does a great job communicating the basic features of the German model to a general public. He writes (a bit shortened and edited by me): 14/
on.ft.com/3D9Vj0r

So using the term “lump-sum” in a non-standard way (with a completely different definition as the general public is using) does not help clarifying the central points when communicating with the wider public.
It arguably even rather murkies the waters. 13/

Yet, and this is also important: The proposed German scheme lowers the average price of gas consumed by gas-using households, and this is what the government wanted to do.
This is also why this scheme will lower inflation next year.
A lump sum would not lower inflation. 12/

(Side remark: It remains to be seen how relevant this feature is empirically. We will see how many households actually reduce their gas consumption by more than 20 %. If this share is low, this feature was empirically rather unimportant.) 11/

I understand that it is important to communicate that the marginal price of natural gas remains the same over the whole spectrum of possible gas savings under the German scheme. As Martin Sandbu pointed out, this is a clever element of the German scheme. 10/
on.ft.com/3D9Vj0r

The monthly rebate is in many ways the opposite of the standard definition of “lump-sum”. The rebate is not “large”, but on average in the magnitude of 100 € to 200 €, and it is not a one-off-payment, but a monthly reduction. 9/

Rather, it is designed to keep the costs of a certain amount of gas usage (80 % of last year's consumpiton) on average below 12 Cents/kWh. If gas prices rise, so does the rebate. 8/

Unser Soundtrack zum Zwischenbericht der #Gaspreiskommission .

Useful thread for those trying to understand the innovative gas pricing proposal for Germany from Isabella M. Weber and Sebastian Dullien

Important thoughts by Martin Sandbu on interventions in energy markets-great to see Monday's discussions at Forum New Economy reflected in the @ft.
Isabella M. Weber Thomas Fricke
Cansel Kiziltepe Stefan Profit Karsten Neuhoff
Claudia Sahm 🇺🇦 Tom Krebs Lisa Badum

on.ft.com/3D9Vj0r