by Nick Butler*
The conflict at the heart of Germany’s energy policy is finally coming to a head. Can Germany claim to be an environmental leader while continuing to burn more coal than any other developed country apart from the US?
The issue is easier to describe than to resolve. Germany has led the EU in adopting "green” policies, including the promotion and subsidy of renewables. Energy consumers, including industry, have tolerated ever-rising energy costs. Electricity in Germany costs over 90 per cent more than in the US. The country has begun the process of closing its nuclear power stations — the last will be closed in 2022, although a vexed question remains over how the decommissioning will be paid for. Energy policy enjoys support across the political spectrum. The Green party won just 7.3 per cent of the vote in the last federal election but green ideas permeate the thinking of all the other parties. The grand coalition between the Christian Democrats and the Social Democrats is committed to reducing emissions by 40 per cent by 2020, 70 per cent by 2040 and 80 to 95 per cent by 2050. The whole plan is explained in a post by Mat Hope on the CarbonBrief website. The German approach is now being exported to Brussels with a determined effort under the new European Commission to shape an EU energy policy along the same lines.
The only problem is that the country is not as pure and green as the rhetoric would suggest. Emissions have risen over the last three years. Renewables, led by solar and wind, have grown, but 44 per cent of German electricity is still produced from coal, and in particular from lignite or brown coal — one of the most carbon-intensive forms of primary energy. Coal-fired power plants account for a third of all emissions. The arbitrary decision to close the country’s nuclear sector after Japan’s Fukushima disaster opens the door to an increase in coal consumption. Between 2011 and 2015, Germany will have more than 10GW of new coal-fired capacity, much of it using local lignite.
As if that were not enough, the country has led the way in blocking the testing of carbon capture and storage — the only known means of limiting emissions when coal (or other hydrocarbons) is burnt. German politicians have also noticeably failed to support the imposition of an effective carbon price. The hypocrisy of all this has long been noted by other countries in Europe, tired of being lectured by a nation that cannot solve its own problems.
Finally, however, the issue is being addressed. The government is applying US-style regulatory tactics to reduce emissions from coal-powered plants by setting ever higher standards. Under the plan announced by Sigmar Gabriel, the German economics and energy minister, the regulations will eliminate some 22m tonnes of carbon emissions and will allow the country to meet its stated targets for 2020.
The question is whether the plan will go through or if Mr Gabriel, whose SPD party depends on trade union support, will back down. The opposition to the policies is being led by the utilities — which are finding it ever harder to justify continued investment in the sector — with strong support from the work force particularly in regions such as North Rhine Westphalia and Saxony, where the coal-fired plants are concentrated. Three weeks ago, 13,500 people marched through Berlin in defence of brown coal, claiming that 100,000 jobs were at risk — a figure Mr Gabriel denies. The opposition has some support within Chancellor Angela Merkel’s party, not least from those who emphasise the cost of the energy transition — the energiewerende — €134bn on some recent estimates. As yet, however, no serious politician has been bold enough to challenge the core green agenda.
The argument confirms the view that one of the key fault lines of European politics is the green agenda. This takes many forms. In some countries, such as France and the UK, it is about opposition to shale gas development. In others, such as Germany, the issue is nuclear power. Climate change is the backcloth but when you get closer to the ground the issues at stake are also about the immediate local environment. The agenda cuts across the traditional political dividing lines and leaves politicians brought up to fight about income distribution and national security stranded. The green cause goes beyond any normal definition of rationality — these are issues of faith and you either believe or you don’t. Mr Gabriel, like Mrs Merkel, is caught in the middle of all this.
In political terms, the decision on what happens to coal is a crucial test of will between two of the key forces in German society — the green movement on one side and industry and the unions on the other. A temporary solution may be fudged — Mr Gabriel has said he is reviewing the plan — but the conflict will not go away and you would have to say that the momentum is now with the greens.
This may seem like a local political problem — a source of undignified laughter among those who think the Germans take themselves too seriously. Schadenfreude is not an exclusively German pleasure. But the issue is of wider importance. If the measures against coal go ahead there is every chance that something similar will be applied across the EU in the years to come. If a carbon price is beyond reach, tougher regulation can do the job. On the other hand, if the trade unions and the utilities win we may be seeing the turning point — the moment at which the green agenda reaches the limits of the possible in terms of the sacrifices which electorates are prepared to make.
*The writer is visiting professor and chair of the Kings Policy Institute at Kings College London
www.ft.com, 24 May, 2015
