Friendly Big Cars?

The dilemma came to a head when Chancellor Angela Merkel's government debated an economic stimulus package in October.

With global talks on a new climate-saving pact due next week in Poland, the dispute underlined the conflict between ecology and the economy.

Germany initially wanted to grant two-year vehicle tax rebates to buyers of all cars with sophisticated technology to reduce and purify emissions, but an outcry from environmentalists halted the plan.

The green camp was upset that even powerful sports utility vehicles with clean engines could claim the subsidy, while all cars would receive half the subsidy, no matter how polluting they were.

One group, Greenpeace, accused the government of encouraging "climate hog" motorists who drive heavy SUVs and limousines.

Road vehicles account for about a fifth of Germany's carbon-dioxide emissions, so reducing car exhaust could help Europe's largest economy meet its climate goals.

The export problem

The trouble is, cars are one of Germany's main exports.

The cars that the world -- and many Germans -- want to buy from Germany are not small fuel sippers, but big, strong cars that eat up the kilometers and keep occupants in a steel cocoon of safety.

Despite localized speed limits and widespread congestion, there are still plenty of no-limit sections on German autobahns where the usual cruising speed in the fast lane is 160 kilometers per hour (100 mph) or more.

A few weeks ago, Germany's main Lutheran church group asked pastors to set a good, green example to their flocks by limiting their autobahn speed to 120 kilometers per hour.

However, there seems to be no sign that such restraint is catching on.

Speed limit allergy

Germany's auto industry regularly opposes efforts to introduce a national speed limit, and it suggests that environmentalists who call for weaker, slower cars are out of touch with ordinary Germans.

The industry has lobbied against earlier implementation of European Union fuel-economy and carbon-dioxide standards for cars.

"The German government is trying to stop effective CO2 limits and acting as an errand boy for incorrigible auto executives," accused Juergen Resch, head of the German environmentalist lobby group DUH.

The controversy in Berlin over vehicle-tax rebates, which has rumbled on for two years, has not gone away.

Under pressure, Merkel chose to delay. She has promised the half subsidy to all new-car buyers, and said that her government will next year fine-tune the low-emissions element of its subsidy program.

The tax dilemma

The squabble seems set to continue next year, with environmentalists pushing for a tax scheme that acts as an incentive to buy lower-powered cars.

Two states -- Bavaria, home of BMW, and Baden-Wuerttemberg, home of Mercedes-Benz and Porsche -- pressed ahead this month and said they would distribute the tax rebates in the form that environmentalists oppose.

The auto industry is also pushing for another incentive which it contends will be good for industry and good for the climate at the same time: a buy-in of polluting older cars.

Martin Winterkorn, chief executive of Volkswagen, has claimed that scrapping every car made before 1999 currently on German roads would reduce total carbon dioxide emissions by 11.2 million tons.

General Motors' German subsidiary Opel has also argued for a buy-in as a way to help the stumbling industry.