The good news is that the government has agreed to take all brown coal power plants – emitters of large quantities of carbon dioxide (CO2) - off the grid by 2020.
The deal means that 2.7 Gigawatts of carbon-heavy energy will no longer be flowing into German houses.
The bad news, at least from the point of view of environmentalists, is that plans proposed by the left-wing Social Democratic Party (SPD) to fine big polluters have been dropped.
Instead the right-wing parties in the government have seen to it that the operators of brown coal plants will be compensated financially for their loss of a market.
This is the result of five hours of talks between party heads Sigmar Gabriel (SPD), Angela Merkel, Christian Democratic Union (CDU) and Horst Seehofer, Christian Social Union (CSU), in the Chancellery on Wednesday evening.
Insiders praised the deal as a big step towards achieving Germany's climate change goals.
The deal meant that “Germany will reach its target of reducing C02 emissions by 40 percent by 2020 in comparison with 1990,“ one insider told the Süddeutsche Zeitung.
But environmentalist groups were far from happy with the result, accusing Gabriel of betraying a previous pledge to fine heavy CO2 emitters.
Die Linke (the Left Party) climate spokeswoman Eva Büllinger.Schröter said "Gabriel will have to take his clever concept of a climate levy to the grave. Instead the government is enriching the polluters from RWE, Vattenfall and Mibra."
In March Gabriel announced plans to levy a tax on fossil fuel power plant which are more than 20 years old, a proposal which was met with anger by his coalition partners at the time, with one CDU politician describing it as "abysmal."
Greenpeace also reacted with dismay on Thursday to news of the deal.
"Angela Merkel has broken her promises on climate from [the G7 summit at] Elmau," Tobias Münchmeyer, a climate expert from the group, fumed.
The agreement means that coal operators "are required to save less CO2 and are handed millions of euros in return," he said.