Renewable energy

Keep it real, Germany

Kohlekraftwerk Niederaußem Windpark Windenergie
An expensive change: A coal-fired power plant and proposed replacements. Source: Picture Alliance/chromorange

It is both annoying and embarrassing that it takes a world climate conference, held in Germany no less, before we can begin a serious debate on efficient environmental protection in this country. Germany – and above all our leader, Angela Merkel, also known as the “climate chancellor” – is in an embarrassing position now. No one really believes that the country can still live up to its pioneering role, a role it imposed upon itself.

We now know that it was grossly negligent of Ms. Merkel’s former coalition government – her Christian Democrats ruled with the pro-business Free Democratic Party between 2009 and 2013 – to commit to reduce greenhouse gas emissions by 40 percent by 2020, compared with 1990.

This is not just an assessment we can make in hindsight. When that 40 percent target was announced, there were already many who warned against making false promises. Once again, the very wide gap between symbolism in politics and economic, technical and physical realities is obvious.

For no good reason, Germany is maneuvering itself into a situation in which we will need to discuss security of supply.

Goodwill alone does not equal success. Firstly, we should be considering whether the objective we are aiming for is realistic, and secondly, we should look for appropriate instruments to achieve it.

In the debate on the phasing out of coal, the predicament we now face because of that 40 percent target is clear, a stated target that is not even binding under international law. For weeks now, politicians in Berlin have been wrangling over when coal-fired power should be phased out. Everyone involved has long known that it’s on its way out in Germany. And thank god for that.

But now we are supposed to make a swift decision on the speedy demise of an entire chain of power plants. For no good reason, Germany is maneuvering itself into a situation in which we need to discuss whether we will still have security of supply after a certain number of plants are shut down.

Anyone involved in the debate has been fitting the available data into their own agenda. Environmentalists see no problem in shutting down a large number of old power plants. But the biggest industrial users of electricity see the security of supply threatened by even a small number of shutdowns. None of that increases investor confidence in Germany as a place to do business.

In addition, the whole debate is focused on coal-fired power and the energy sector. But why? The energy and industrial sectors are already subject to the European Emissions Trading Scheme rules. The system has many weaknesses but also some undeniable strengths: It ensures that politically desirable emissions reductions in those sectors become reality, and with clockwork precision.

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The number of emission certificates is being reduced year after year, and it is clear that the energy sector will achieve its targets by 2030. Why then are we sprinting toward a goal in the medium term, that could potentially impact the security of supply in Germany?

Instead of fighting the same old battle against coal-fired power plants, lawmakers should focus energy on more forward-looking projects, such as how to create a practical, efficient set of instruments to protect the environment without also creating unnecessary distortions.

Proposals are on the table. They all revolve around the idea of slowly but surely attaching a price to carbon dioxide in any sector – from agriculture to construction – that will force a shift toward renewable and sustainable technologies. On would hope that these proposals would be taken seriously and discussed in Berlin during coalition talks to establish the new government.

One more word on Germany as a role model function: Setting an example for environmental protection is an expensive trick, but ultimately not very useful. Anyone who’s read up on game theory will come to the conclusion that a “good deed” is rarely rewarded in negotiations.

Only the fact that Germany has pressed ahead with renewable energies has had any genuine impact: With payments in the three-digit billions, electricity consumers have helped wind turbines and photovoltaic systems achieve a worldwide breakthrough. But many critics say that this could have been achieved much more cheaply.

Germany is only a good example of a nation that protects the environment if its economic success continues. Setting goals that are unlikely to be achieved, and which politicians cannot stand by determinedly, are goals that should not be set in the first place. Otherwise, Germany’s shining example simply becomes another case of what not to do.

To contact the author: stratmann@handelsblatt.com

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