German chancellor Angela Merkel is preparing to spring an ambush on President Trump at this year’s G-20 summit in July. And Trump’s response will determine whether his presidency plays out like George W. Bush’s second term or puts America’s energy exceptionalism at the service of reviving American greatness.
Less than two months into his presidency, Bush shocked the world when he announced he was keeping his word: The U.S. would not be implementing the Kyoto Protocol signed by his predecessor. Referring to “the incomplete state of scientific knowledge of the causes of, and solutions to, global climate change and the lack of commercially available technologies for removing and storing carbon dioxide,” Bush declared that he could not sign an agreement that would “harm our economy and hurt our workers.” Instead, America would work with its allies and through international processes to “develop technologies, market-based incentives, and other innovative approaches.”
It was a breath of fresh air in a fug of tired thinking on emissions cuts. But then, a strange thing happened. One by one, innovative approaches were discarded and the Bush administration found itself sucked back into U.N. climate-change negotiations.
At the 2005 Gleneagles G-8, summit host Tony Blair cornered Bush. “All of us agreed that climate change is happening now, that human activity is contributing to it, and that it could affect every part of the globe,” Blair stated in his chairman’s summary. “We know that, globally, emissions must slow, peak and then decline, moving us towards a low-carbon economy.” This position was reflected in the summit communiqué, putting Bush on the hook for economically damaging policies that he would never escape.
His climate-change strategy paved the way for Barack Obama’s. In domestic energy policy too, the final two years of the Bush presidency turned out to be a prelude to President Obama’s eight. They saw the nonsensical call to break America’s addiction to oil. There was the goal of reducing gasoline usage by 20 percent and the alternative-fuel mandates and the aggressive fuel-economy standards embodied in the Energy Independence and Security Act of 2007, a monument to the folly of bipartisan energy policy.
The Bush-Obama climate strategy collapsed at the 2009 Copenhagen climate summit, when China and India successfully opposed any multilateral treaty that would threaten to cap their emissions. After Copenhagen, President Obama’s climate envoy, Todd Stern, crafted a new and, in many ways, ingenious strategy: The Obama administration would get the Chinese on board by exempting them from the emissions-cut obligations borne by other countries in the developed world. Stern’s strategy was to bypass the Senate, an indication of the one-sided nature of the commitments being made by the U.S. and other Western nations.
The risk in such unilateral executive action was always that it could be undone if a Republican won the White House in 2016. Speaking a year ago, after the Supreme Court slapped a stay on the EPA’s Clean Power Plan, Stern explained that a Republican president was unlikely to scrap the Paris deal because of the international outrage such a move would provoke. Evidently the strategy failed to anticipate Trump’s meteoric rise.
At the 2005 summit, Tony Blair had just won a third term. This year, Angela Merkel faces a tougher-than-expected reelection battle and needs a big summit win against Trump. In turn, Trump could shine a spotlight on Germany’s disastrous energy policies, telling it as it is.
No other country in the world is pursuing such a radical course, Germany’s leading energy expert and nature conservationist Fritz Vahrenholt says. Under the Energiewende de-carbonization plan, Germany is aiming to increase its share of renewable energy to between 80 and 95 per cent of total energy supply by 2050. Of all the countries in the world, the U.S. has the most to lose from being bound by the Paris agreement. Already renewables are costing German consumers €25 billion ($26.6 billion) annually.
This year, the extra renewable levy on power bills is rising to 6.88 euro cents (7.31 U.S. cents) per kilowatt hour, compared to the average 12.75 cents per kilowatt hour American households paid in November. Nearly 60 percent of Germany’s wind and solar energy is dumped on neighboring countries. Wind investors are being paid €1 billion ($1.06 billion) a year when there’s too much wind. Without coal-fired power stations, the grid would collapse. Yet, according to Vahrenholt, “the atmosphere has not been spared a single ton of carbon dioxide through German zeal.” Indeed, emissions from the power sector have been flat and even rising and the total CO2 reductions Berlin promises by 2020 will be wiped out by China in a mere three months.
America is being told that if Trump pulls out of the Paris climate agreement, he will be handing leadership on the issue to China. There is a German proverb that nicely explains what an excellent idea that would be: A donkey walks across the ice until it breaks. (Single-minded pursuit of an irrational and self-destructive course of action is scarcely unknown in German history.)
Of all the countries in the world, the U.S. has the most to lose from being bound by the Paris agreement. It has nearly half a trillion metric tons of coal. It has surpassed Saudi Arabia and Russia to become the world’s top energy producer. After decades of futile efforts from presidents of both parties, it has finally broken the OPEC oil cartel thanks to the frackers of the Permian, the Marcellus, the Bakken, and the Barnett.
China, meanwhile, can never hope to equal America’s spectacular energy ascendancy. It can only display climate leadership by torching a couple of trillion dollars on dead-end wind and solar technology. If Beijing follows through on its voluntary commitments under the Paris agreement, by 2020, the Chinese will have installed 200 gigawatts of wind capacity and 100 gigawatts of solar. That’s more wind and solar than the U.S., Germany, Britain, and Spain combined.
Donald Trump won’t need to renegotiate any trade deals with China — or anyone else. Higher energy costs caused by inefficient and expensive renewables will act as a self-imposed energy tariff on China’s manufacturing exports. The U.S.’s leading competitors will hand it the most favorable trade deal imaginable by making their energy more expensive while the American hydrocarbon revolution continues apace, giving American businesses and workers a large and growing competitive advantage.
Americans did not vote in November for climate martyrdom. Naturally, America’s partners and rivals want the U.S. to share in their climate pain and worry that American industry will clean their clocks with its access to the world’s most abundant energy reserves.
There’s more than economics at stake. As Vahrenholt puts it, a serious move by Germany away from its Energiewende “would amount to an admission of a strategic blunder, with unforeseeable consequences for the current political establishment.” Saving face is not a good reason for the United States to follow suit. Indeed, Donald Trump would be doing Germany and Europe a big favor by using the question of American participation in the Paris agreement as a “teaching moment” on the folly of their energy policies