Development aid is a key point on the agenda at the upcoming G8 summit. According to the business daily Handelsblatt, Germany's plans to increase assistance should be in part financed by trading carbon dioxide certificates.

Chancellor Angela Merkel was advocating a corresponding suggestion by Development Minister Heidemarie Wieczorek-Zeul, the paper reported in its Wednesday edition. The majority of the cabinet also supported Wieczorek-Zeul's recommendation, it said, citing government sources.

The paper wrote that the coalition government of conservative Christian Democrats (CDU) and the center-left Social Democrats (SPD) planned to trade 10 percent of its carbon dioxide certificates.

Development aid -- or a tax break?

From 2008, the government will have annual proceeds as a result of the trades, which are estimated at 500 million to 800 million euros ($670 million to $1.1 billion), Handelsblatt said. A part of this was earmarked for development aid, which Germany has pledged to increase by 2015 to 0.7 percent of its gross domestic product.

But politicians in the CDU-SPD coalition who support traditional energy sources are calling for the proceeds to be used in an energy savings fund or to relieve medium-sized companies in energy taxes.

Emissions-trading is one of the most significant approaches used to control pollution. Companies or groups needing higher allowances for pollutants have to buy credits from those who pollute less. On the other hand, companies operating clean power plants can sell surplus certificates for money.