Germany’s Climate Agenda On The Brink Of The Abyss
Germany’s once-in-a-century experiment Energiewende will enter its hot and decisive phase next weekend. Germany is serious about being the only industrial country in the world to simultaneously abandon nuclear energy and coal-fired power generation.
The 31 members of the government commission “Growth, Structural Change, Employment” will decide on the final plan on Friday evening. It will not be a good plan. It is expensive, risky and will hardly benefit climate protection.
There are plans for a new political intervention in the energy market that is more serious and riskier than the decision to phase out nuclear power. According to the plan, five to ten large power stations are to be shut down by 2022. According to the plan, by 2030 half of the coal-fired power plants which currently provide around 50 percent of Germany’s electricity requirements, will have been shut down.
Power plant operators will receive billions of euros in compensation, the affected federal states and districts more billions as adjustment aid, the coal miners billions as transitional money. And because this massive state intervention in the market increases the price of electricity for everyone, Germany’s energy-intensive industry is also demanding subsidies of between 14 and 54 billion euros by 2030 so that it can survive international competition. All in all, it will cost many billions of euros. However, is all of that tax money well spent?
So far, there has been no cost-benefit analysis. Essentially, the taxpayer pays enormous sums for the marginal acceleration of a coal phase-out that had already begun long ago and was already within sight. A large part of the German lignite opencast mines would have been depleted by 2030, and the remaining lignite reserves would have been exhausted by 2050 at the latest.
But the well-functioning European emissions trading system is pushing coal-fired power plants out of the market without the need for additional national measures. Germany’s share of global CO2 emissions is just two percent. If the German government forces the phase-out of coal a little earlier by using multi-digit billion euro sums at the taxpayer’s expense, the climate protection effect against the simultaneous massive expansion of coal-fired power plants in China and India can hardly be measured.
Without any appreciable influence on the average global temperature, Germany’s withdrawal from coal can only be justified by its exemplary function. Other countries would be encouraged to follow suit if such a large industrial nation as Germany can prove that deep decarbonisation is possible. Unfortunately, the German coal phase-out does not provide such a proof.
Buying up and shutting down an entire industry practically with astronomical amounts of tax money is not a blueprint that coal countries like Poland, the Czech Republic, India or South Africa could follow, even if they wanted to. In its search for role models, international climate policy is therefore no longer looking to Germany, but to Great Britain (sic), which has successfully reduced the share of coal to a pre-industrial level within just a few years by means of lean CO2 pricing.
Such reservations about abandoning coal are not automatically reservations about the energy system transformation: If renewable energies can be upgraded to reliable electricity suppliers with the help of storage facilities and grids, they will automatically displace fossil power plants with their higher production costs. But taking coal-fired power plants out of the system by government intervention before sufficient grids, storage facilities and green electricity suppliers are in place only tears up a dangerous energy gap, of which it is not clear whether and how it can be closed.
To rely on electricity imports from abroad in an emergency, as the Federal Government explicitly does, is a risky bet. After all, more and more conventional power plants are being taken off the grid in all neighbouring countries. Climate activists and green politicians, who deduce the existence of over-capacities from the annual average values of German electricity exports, have either failed to understand the energy market or are deliberately misleading the pubic.
Angela Merkel has made a shrewd move with the appointment of commissions: Already during the nuclear phase-out a committee composed of representatives of “civil society”, scientists and and church people legitimized later on the rather lonely decision of the Federal Chancellor. In answering the question as to whether an exit from coal is necessary, appropriate and feasible, the head of government once again has simply shifted the responsibility onto a commission. But it is by no means certain whether the calculation will work out this time.
That is because if the coal commission agrees on an exit plan, the recommendations should lead to a German climate protection law. But a federal law on climate protection would be new legal territory. Ideally, such a law would give both industry and energy producers long-term planning security.
Depending on its form, the planned law could also become a weapon in the hands of non-governmental organisations (NGOs) which would sue the government for political climate protection measures in court. As is already the case today with diesel driving bans, German climate policy could end up in the hands of judges who are challenged by technical issues.
Despite the high technical level of the Commission’s work, the final paper is still being haggled over like traders at the bazaar. Industry is already threatening to veto the plan if billions in electricity price compensation are not forthcoming. Representatives of environmental groups insist on the immediate shutdown of power plants to an extent that other members of the commission consider irresponsible.
It remains uncertain whether the Commission can agree on a roadmap that policy makers can also sell as a socially accepted coal compromise. If the coal commission fails, the Chancellor will be faced with the ruins of her climate policy.