German officials have acknowledged that the government will not meet its emissions goals for 2020. To avoid repeating this failure in 2030, the government will unveil a new climate protection package on Friday.

Leaders of the ruling coalition held 18 hours of talks overnight, with news agency Agence France-Presse (AFP) reporting that a breakthrough had been achieved.

Among other things, the package that has been agreed upon contains a mechanism for monitoring progress on reaching emissions goals, AFP said, citing coalition sources.

Chancellor Angela Merkel, of the conservative Christian Democrats (CDU), and Vice Chancellor Olaf Scholz, of the center-left Social Democrats (SPD), appear united when they say change has to happen — and it has to be big.

In the Bundestag, Germany's lower house of parliament, Merkel made her position clear. "Doing nothing is not an option," she said.

Though there are financial costs to climate protection measures, Merkel said, the price of inaction is far higher.

Read more: Europe's climate woes — can this tech help?

Scholz, who also serves as finance minister, said Germany must embrace pioneering technology to fight climate change. "We can do this because we have the economic capabilities and the engineers," he said after an SPD leadership meeting in Berlin on Monday.

Scholz said investment in technology would allow Germany to maintain a strong economy and offer job opportunities, and continue its export success.

And he has supporters within the SPD. "If we set the right course, then climate protection in the medium term can be better than any economic stimulus package," acting party chief Malu Dreyer said.

In pictures: Environmentalist groups and their concerns Joining forces: Environmental groups team up Groups at the protest included #FridaysForFuture, an environmental protest movement started by activist Greta Thunberg. She sat outside the Swedish Parliament every day demanding the government take action on climate change. Her example soon sparked international school strikes. Other key groups in attendance were Greenpeace, cyclist-safety visibility group Critical Mass and Extinction Rebellion.

In pictures: Environmentalist groups and their concerns Cyclists riding for change Critical Mass is a cyclists' environmental protest bicycle ride. It started in 1992 in San Francisco, and now Critical Mass groups are found all over the world. They organize rides in large groups that often block roads to make car drivers aware of cyclists. The Critical Mass website speaks of a "cycling culture that refuses to take a back seat to motorists."

In pictures: Environmentalist groups and their concerns Greenpeace: In the place where change happens Greenpeace is a non-violent environmental activist group. The organization has set out a plan for the world to be on track by 2020 to keep global climate change below 1.5° C. Among other aims, the group hopes to tackle environmental degradation of forests and oceans.

In pictures: Environmentalist groups and their concerns The death of the combustion engine? Evidence has towards the combustion engine's contribution to increasing global temperatures. The German Aerospace Center (DLR) study on car transport, commissioned by Greenpeace Belgium, concluded that to achieve a 66% likelihood of keeping global warming below 1.5°C, diesel and petrol cars must be rapidly phased out in Europe with an end to new sales by 2025.

In pictures: Environmentalist groups and their concerns "We can't replace our lungs" Air pollution is another target for environmental activists. Air pollution has reached dangerous levels in many cities across the world and there is mounting research on the damage it inflicts on humans and fetuses.

In pictures: Environmentalist groups and their concerns An end to SUVs According to the Greenpeace "Crashing the Climate" report into the effect of the car industry on the environment, SUVs are particularly damaging to the environment. Due to their higher weight and less aerodynamic body, SUVs produce significantly higher CO2 emissions than other cars.

In pictures: Environmentalist groups and their concerns Down with auto-cracy Many protesters and environment groups think that governments have been too slow to enact meaningful change to ensure the Earth's temperature doesn't rise above the 2°C benchmark set by climate scientists. Author: Kate Martyr



'Mix of instruments'

Merkel's political career is drawing to a close. Will she be remembered for her failure in getting Germany to meet its own emission targets? Or will she go down in history as the "Climate Chancellor?"

Scholz has his eyes on the SPD leadership, and he would likely have to keep his party in the governing coalition with the CDU and its allied Bavarian party, the Christian Social Union (CSU).

That would be no easy task for Scholz. A majority of SPD members are now against staying in the grand coalition, known as the "GroKo."

Scholz has remained loyal to the GroKo, and a large climate package could score him points within the SPD and enable him to seize the party's reins.

Read more: Merkel's government delivers on promises, but voters aren't convinced

So far, only general outlines of the package are known; the finer details are yet to be unveiled. Environment Minister Svenja Schulze (SPD) said it would be a "mix of instruments."

"We will adopt an agenda with a wide range of measures," she said, "but all of which will steer in the same direction, namely to reduce CO2."

A central component in the strategy to reduce CO2 is financial incentives — especially for transport and building construction.

Germans who invest in new windows, roofs or heating systems and want to make their house more climate-friendly can likely look forward to a tax reduction, and a bonus for scrapping oil-powered heating systems.

Transforming transport

The government intends to put 7 million electric cars on the roads and incentivize buyers with a bonus of several thousand euros. Millions of additional charging stations are to be built to power the vehicles.

A fundamental element is a shift toward rail travel. To this end, the value-added tax (VAT) on train tickets will be lowered, and local public transport systems expanded.

The CDU wants to double the tax on airline tickets to almost €15 ($16.50), and extend the levy on freight transport to all roads in Germany.

Read more: German issues in a nutshell: 'Energiewende'

Though the CDU and CSU are focusing on emissions trading and a market-based solution for CO2 pricing, the SPD is demanding higher energy taxes.

"In the future, anyone who pollutes the environment more than those who care for it will simply have to pay more," said Dreyer, the acting SPD head. "Those who conserve the environment should benefit financially from doing so," she added.

The SPD insists that climate change measures must not squeeze low-income earners. "We are aware of the worries about rapid and expensive changes," Dreyer said.

Dreyer pledged that the SPD will see "that things remain equal and fair."

Cutbacks or debt?

The costs of the measures are expected to be high, but, at the same time, politicians are insisting that the average person should bear as little of the burden as possible.

"The truth is that climate protection cannot be achieved at zero cost," Scholz said. "This applies to both the federal budget and to citizens."

Svenja Scholz, Malu Dreyer and Olaf Scholz want Germany to invest in climate protection

As finance minister, Scholz has set out the 2020 federal budget without earmarking any new debts. Can this be maintained?

Scholz said additional revenue from cost increases tied to CO2 emissions would create "more room to maneuver than one might think."

But he has been crunching the numbers with his coalition partners in mind. The CSU/CDU are unwilling to sacrifice the "black zero" of a balanced budget under any circumstances — not even to protect the climate.

That is why the debate within the CDU has become such a heated one: The party leadership maintains that if extra environmental costs are necessary, they must be absorbed by making cutbacks elsewhere.

Read more: German 'meat tax' on the table to protect the climate

For the SPD, slashing public spending to earmark funds for the environment is not an option.

Though Scholz still officially toes the line of the "black zero" policy, a majority in his party have no problem with increasing spending, especially as there are no laws that require the federal budget be balanced.

In 2011, Germany's constitution, the Basic Law, was amended to strictly limit government deficit. But it still allows an additional spending margin totalling 0.35% of Gross Domestic Product (GDP).

Currently that would amount to €12 billion per year — an amount that would certainly help finance the climate package. And now even business leaders are advocating that the "black zero" should not be maintained at all costs.

The Greens want to go a step further: Party co-leader Robert Habeck called the debt brake a hangover from a time when high-interest rates limited the capacity for political action.

Habeck demands that the debt threshold be adjusted in line with the guidelines for European stability. He calculates that this would amount to €30-35 billion yearly for additional "financial scope."