BERLIN (AP) — German Chancellor Angela Merkel says market-based mechanisms such as carbon pricing will be necessary to effectively reduce emissions of climate-warming gases.

Merkel said Friday she's "encouraged" by a report from independent economists that suggests bans and other regulatory measures alone won't be enough to curb emissions.

The leader of Europe's biggest economy said her government aims to reach a decision by the end of September on what steps to take to achieve its targets.

Merkel told reporters in Berlin that "these won't be easy decisions."

German ministers will discuss several expert reports on CO2 pricing at a special 'climate Cabinet' meeting July 18.

The country's environment minister called last week for carbon taxes to be used at least in part to financially boost low-income households.