Climate Change

It's not easy being green

RWE Power AG Kraftwerk Niederaußem
Climate talks are just heating up. Source: DPA

As 25,000 participants prepare to make their way to Bonn next week for the UN Climate Change Conference, Germany is grappling with the fact that its own efforts in the direction of renewable energy are not looking all that positive.

For two weeks starting on November 6, attendees will confer on climate change and environmental protection, travelling around in electric and hybrid buses as well as special electric shuttles. The conference organizers have a goal of using 80 percent renewable energy at the event, and everyone is being asked to switch off the lights whenever they leave the room.

So it’s a bit awkward that the host country is falling short of its own renewable energy goals, according to a new report obtained by Handelsblatt. The government-appointed four-person panel to assess Germany’s exit fossil and nuclear fuels, which has been operating since 2011, said insufficient progress is being made in four out of six areas of Germany’s climate change policy. Only two fields can be marked satisfactory.

“Not everything has moved in the right direction in climate and energy policy in the last year.”

Andreas Löschel, chairman of Germany's government panel on energy transition

Germany’s performance in the reduction of CO2 emissions is marked red, meaning unsatisfactory. On the eve of hosting the UN conference, that assessment is an embarrassment to Chancellor Angela Merkel. The bold bid to steer Europe’s largest economy into clean, green energies by 2050 is one of the most important policies of her chancellorship.

“Not everything has moved in the right direction in climate and energy policy in the last year,” the panel’s chairman, economist Andreas Löschel, told Handelsblatt. “The next government will have the great challenge of having to fundamentally reorganize things.”

At the conference, ministers and diplomats from 197 countries will negotiate how to implement the 2015 Paris Agreement on climate change, which aims to contain the rise in global temperatures this century to 2 degrees Celsius above pre-industrial levels.

Germany will “participate actively in spreading good ideas and solutions for protecting the climate,” Germany’s outgoing environment minister Barbara Hendricks said recently. But that won’t be easy. Berlin’s own experts don’t see their government’s current mix of instruments as a good example to follow. Their report actually urges the government to rethink the design of energy and climate protection policies.

Controversially, the panel’s report says Germany’s climate-change-fighting tools consist of a large number of small regulations on one hand and exemptions from burdens on the other, and that those exemptions were in some cases driven by vested interests.

“Now is a good time to take stock and create a medium-term outlook,” said Mr. Löschel. “But it is not about giving up the goals.”

greenhouse gas emissions
Germany promised to cut greenhouse gas emissions by 40 percent by 2020 compared with emissions in 1990. But with the deadline just a few years away, the reduction was just 27 percent, and emission levels have started to rise again.

Some of the experts’ recommendations seem directly addressed to the political parties currently in coalition negotiations in Berlin: Ms. Merkel’s Christian Democrats, the Greens and the pro-business Free Democrats, or FDP.

For example, the panel recommends prolonging the timeframe for the energy transition to 2030. They see this as a more realistic goal. But the Greens are insisting on doing everything possible to meet the government’s interim goals for 2020, such as shutting down the country’s dirtiest coal-fired power stations immediately, which the CDU and FDP oppose.

The experts said the biggest need for change is in the transportation sector, where CO2 emissions have risen in recent years. “In addition to alternative drive systems and improvements in energy efficiency, measures must be taken to reduce and relocate traffic, to use the existing transport infrastructures more efficiently and also to remove the many network bottlenecks to ensure an integrated long-term strategy,” they wrote.

They also recommended introducing a more generalized form of pricing emissions to ease the transition and make renewable energy more competitive against fossil fuels. The more generalized system should replace the dozens of more detailed rules. Whether the political will is there, is another question. The coalition partners for the next German government are still far apart on CO2 pricing, according people familiar with the talks.

“Without CO2 pricing, the climate goals can’t be implemented,” said Ottmar Edenhofer, the internationally respected chief economist of the Potsdam Institute for Climate Impact Research who will attend the talks in Bonn. “Paris formulated an ambitious target, and now it’s time to talk about instruments for reaching this goal. Are governments ready to use measures to make the climate agreement a success? I’m not so sure.”

Mr. Edenhofer would like to see governments introduce a CO2 price for all fossil fuels to encourage economies to gradually replace them with greener technologies. In Europe, which has opted for an emissions-trading system, the minimum price should be increased incrementally from €30 ($35) per certificate in 2020, to around €40 five years later and €60 or €70 in 2030, he said.

“Are governments ready to use measures to make the climate agreement a success? I’m not so sure. ”

Ottmar Edenhofer, chief economist, Potsdam Institute for Climate Impact Research

“That seems ambitious, but it’s manageable for industries. With a minimum price like that, the Greens, conservatives and FDP don’t need to argue about exiting coal power — the market would solve the problem in a cost-efficient way,” Mr. Edenhofer said. Germany, France, Sweden and the Netherlands could forge ahead with minimum CO2 pricing and if enough countries joined in, others would follow, he said.

Pledges made by the international community to reduce CO2 emissions so far have not been enough to fulfill the Paris Agreement, Mr. Edenhofer continued, and the measures proposed were a complex patchwork that would have to be forged into a globally coordinated set of policies.

“Countries must become more ambitious — and even though no new climate protection plans have to be presented this year, I do expect movement in the debate about how the level of ambition can be increased,” he said.

Klaus Stratmann covers energy policy and politics for Handelsblatt in Berlin. David Crossland and Cathrin Schaer adapted this article into English for Handelsblatt Global. To contact the author: stratmann@handelsblatt.com

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