Handelsblatt Explains

Why Germany is Leading the Charge Against Climate Change

Windkraftbranche verlangt Klarheit von Bundesregierung
Going with the wind. Source: AP

Germans take pride in being green, and don’t appreciate jokes about Kermit finding it not easy. They shop at organic stores. They separate their trash for recycling right down to the color of the glass. And they overwhelmingly support getting out of both nuclear energy and fossil fuels. So they are in shock at the decision of Donald Trump to pull America out of the accord on fighting climate change that 195 countries signed in Paris in 2015. Germans now expect their chancellor, Angela Merkel, to lead the remaining alliance.

Among scientists, the goal of exiting nuclear power generation (which emits no carbon dioxide) is entirely separate from fighting climate change, caused primarily by fossil fuels such as coal, gas and oil. But in Germany the climate and anti-nuclear movements have been so entwined since their growth in the 1970s and 80s that it’s impossible to imagine one without the other. Out of this movement came the Green Party, the most influential of its ilk in the world. Over the years the Greens have pushed their agenda until it became mainstream. The German moniker for that agenda is Energiewende, where Wende can mean “turn” or “transition,” but also “revolution.”

German Energy-01

The first major legislation of the Energiewende was passed in 2000 under a government of Social Democrats and Greens. Its centerpiece was generous subsidies to anybody installing renewable sources of energy. Soon homeowners were putting solar panels on their roofs, farmers were building biogas plants, and firms were erecting wind mills. A lot of people made good money by feeding this renewable energy into the grid at fixed, high prices. The difference between that guaranteed rate and the market price for conventional energy is financed by a surcharge on consumer’s electricity bills, so that energy became more expensive for households and most firms. But despite complaints by businesses, public support has held firm. A recent reform aims at gradually reducing the subsidies by subjecting new installations to market forces.

That government of Social Democrats and Greens also wanted to to phase out nuclear power. But in 2005 Ms. Merkel became chancellor. Her party, the center-right Christian Democratic Union, still supported nuclear energy. Then, in 2011, disaster struck at the nuclear plant in Fukushima, Japan, and Germans were horrified. They still debate whether Ms. Merkel personally turned over night against nuclear power or merely seized a tactical opportunity to align her party with the social consensus. Either way, she decided to shut down all of Germany’s nuclear power plants by 2022. Nine have been turned off already; the remaining eight will follow.

One objective of the Energiewende, the promotion of wind, sun, and biogas in electricity generation, has succeeded spectacularly. Renewables went from 6.6 percent of power production in 2000 to about 30 percent last year (see chart on the right above). That is still below the ratios in wind-swept Denmark, sunbaked Spain, or Norway, where mountainous fjords are ideal for hydropower. But in a large economy and varied topography such as Germany’s, the change has been impressive.

But because wind and sun are unreliable, conventional energy sources are still needed for the many cloudy and calm days. So there is still a need for fossil-fuel energy. It gets worse. Because renewables depress the wholesale price of electricity, gas-fired plants have been pushed out of the market in favor of much cheaper coal-fired plants and in particular those that run on lignite. Because coal is dirtier than gas, and lignite in turn the dirtiest form of coal, overall carbon-dioxide emissions in Germany have stayed largely flat in recent years (see chart below). The government has admitted that it will probably miss its 2020 target of cutting emissions by 40 percent on 1990 levels. In this respect, the Energiewende has, at least so far, failed.

Germanys Greenhouse Gas Emissions-01

Another explanation why emissions have not fallen is that the Energiewende has so far focused overwhelmingly on electricity generation, which is only one form of energy consumption. Fueling cars, trucks, boats, and airplanes accounts for another huge chunk. So does heating and cooling houses and factories. As a share of total energy usage, renewables thus count for only 14.6 percent in Germany. That is not only much less impressive than their share in electricity generation but also below the EU average (see sidebar).

It is here where the Energiewende clashes with another point of German pride: a love for fast cars powered by combustion engines that speed down Autobahns without speed limits. Unsurprisingly, given the clout of the car industry, but somewhat hypocritically, Ms. Merkel has lobbied for lower European standards on vehicle emissions even as she dons the mantle of “climate chancellor.” The government has declared a goal of putting a million electric vehicles on its streets by 2020. But hardly anybody believes this will happen.

Braunkohletagebau Welzow-Süd
The revolution's dirty secret. Source: DPA

The ultimate goal is an integrated system in which almost everything runs on electricity that is generated mostly from renewable sources. For that Germany will need a smart grid including electricity “super-highways” that bring electricity from the windy northern coasts to factories in the south, and much better batteries to store electricity for peak hours. Only once all this is in place, can Germany take the crucial step of exiting from coal power and gasoline, as well as from nuclear power. Germans, as one psychologist has said, would then at last feel that they have gone from world-destroyers in the 20th century to world-saviors in the 21st.


Ruby Russell is an editor at Handelsblatt Global.

We hope you enjoyed this free article.

Subscribe today and get full access to market-moving news in Europe's leading economy.