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Germany’s Climate Goals Go Up in Smoke

Handelsblatt Global

Germany is often seen as a poster child for tackling climate change. In fact, the country seems almost certain to spectacularly miss its carbon emissions reduction goals for the year 2020.

The climate issue is a crucial sticking point in coalition talks to form a new government under Chancellor Angela Merkel: The Green Party wants to see redoubled efforts to cut emissions, but other parties think the failure highlights that the goals were always unrealistic. Time for a rethink, they say.

A new internal paper from the federal government, seen by Handelsblatt, is scathing about the likely failure to reach climate goals, demanding “an honest discussion about possible consequences.” It says that intensifying current policies would impose unacceptable costs on consumers, businesses and public spending.

The looming climate failure is no secret. The environment ministry recently confirmed that Germany would only reduce carbon dioxide emissions by between 31.7 and 32.5 percent, compared to 1990 levels. The official target is a 40-percent reduction.

The most likely new coalition after last month’s election would feature the Greens along with Ms. Merkel’s Christian Democrats and the pro-business Free Democrats, or FDP. With the FDP and CDU far less inclined to radical energy moves, climate policy is proving one of the toughest areas in coalition talks.

The internal government paper is scathing about costs of forcing even more reductions ahead of the 2020 deadline. In particular, it condemns any rapid phase out of coal-burning power plants: the closure of twenty heavy-emissions plants by 2020 is a key Green policy, along with a total coal shutdown by 2030.

The paper says ditching coal may look like a “quick and easily implemented measure,” but in fact would impose massive costs on coal-dependent regions, giving rise to serious political and social conflict. No rapid moves should be made until a proper economic plan is in place, it suggests.

This verdict will be music to the ears of the CDU and FDP, who make precisely this argument against Green positions in coalition talks. Sources in the environmentalist party suggest that the other parties are refusing even to put the phrase “coal shutdown” on the agenda for talks. Negotiations are set to resume this Thursday.

Skepticism on coal-fired power stations is also held in parts of the renewable energy industry. In an interview with Handelsblatt, Magnus Hall, the CEO of Swedish power company Vattenfall, which has invested heavily in renewables, said that “Without a clear plan for shutting down coal plants, climate goals simply will not be achieved.”

Climate think tank Agora Energiewende said the distribution of the costs of a coal phase out remained the most difficult question in energy reform. “The central question is compensation,” said Agora director Patrick Graichen. “The quicker the shutdown, the more likely that compensation will be necessary for the owners of power plants,” he added.

Mr. Graichen said even shutting the twenty worst-polluting coal plants by 2020 would not be enough to reach climate goals. He said the new German government must implement other radical measures, including replacing older gas- and oil-fired heating technologies and a program of further wind and solar expansion.

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As well as pessimism on a coal exit, the government paper also pours cold water on the results of proposed cuts in other sectors. Since changes to building standards take considerable time, it warns that the construction sector “is unlikely to achieve the necessary reductions in the time before 2020.” It makes a similar judgment on transportation: “Success is unlikely in this sector in the time remaining.”

Its verdict on longer-term climate goals is equally scathing. Germany’s official position is to reduce emissions by 55 percent by 2030, in comparison with 1990 levels. The paper points out that for this, “the rate of reduction will have to be twice as quick as it has been in recent years.” Germany’s current climate-reduction targets, it says, “are extremely ambitious, or to be more precise: unachievable goals.”

All this points to continuing stumbling blocks in efforts to form a new coalition. The Greens are holding to a hard line. But the newly-confident FDP are equally determined to oppose extreme measures which could hit business and consumers. Yet again, it may fall to Ms. Merkel to broker a compromise, enabling the formation of a new government.

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