Fail: Merkel’s market-friendly Climate Plan banks on fairy tales

After months of deliberations, in late September Germany’s ruling coalition, made up of the center-right CDU/CSU and the Centrist SPD unveiled their new climate action strategy—to near universal disappointment. Now approved by the government, the plan’s architects hope a weak plan is better than none at all. L. Michael Buchsbaum summarizes

Friday for Future protestors are disappointed with the climate cabinet’s energy plans  (Photo by Tobias Möritz, CC BY-SA 2.0)

On the same day that millions joined the Fridays For Future marches worldwide, Germany’s so-called Climate Chancellor, Angela Merkel, and her Climate Cabinet announced their €54 billion plan to ensure the nation reaches its 2030 climate targets—the centerpiece of which is a slowly phased-in CO2 price for transport and buildings.

Unsound measures

As proposed, the new national carbon emissions trading system in the transport and buildings sectors will launch sometime in 2021—conveniently around the time the present government would be facing re-election. At that point, the government will begin issuing carbon allowances at a fixed price of 10 euros per tonne. The price will double the following year to a whopping 20 euros per tonne, and subsequently rise five euros per year to reach 35 euros by 2025. From 2026 onwards, the plan calls for a cap to be set on emissions, which will be lowered year by year.

Other measures include the de facto acceptance of the findings of the much-criticized Coal Commission plan–locking in continued lignite mining and all manner of coal burning through 2038. The plan also calls for an increase in the off-shore wind energy expansion and a lifting of the cap on additional solar development. Also there will be several support programs to increase the number of e-cars on German roads and an increased budget for public transport systems. To tackle the buildings sector, the plan provides tax support for energy-efficient modernization of older buildings and a ban of newly installed oil-fired heating systems beginning in 2026.

The packet also includes a potentially legally binding monitoring process to ensure that some environmental progress is actually made as the slew of small incentives gently nudge citizens and businesses away from their carbon-intensive habits.

However, other measures including a 1,000-meter distance rule for siting new wind turbines as a way to enhance their approval rate may actually be nothing more than a poison pill for the entire sector. As initiated by the Bavarian CSU and modeled on newly adopted regulations that have essentially paralyzed the sector locally, such a planning bomb will only hobble an already cratering industry (more on this in the next blog).

To make matters even worse, much of the anticipated future emissions savings through 2030 and beyond are based upon the assumption that this pollution will be sucked up and sequestered into currently unproven carbon capture and storage (CCS) technologies.

Changing the goal posts

What’s certain, however, is that Germany will miss critical national energy transition targets next year–including the reduction of greenhouse gas emissions by 40 percent from 1990 levels. Nevertheless, while sailing past goalposts set by a previous Merkel-led government, today’s Grand Coalition is trying to shift public focus towards ever loftier and distant markers.

“The chances that we’ll reach our 2030 targets have increased,” said Merkel at the joint media conference announcing the new Climate Packet. “And we will do everything to take additional steps if necessary,” she promised.

Into the streets

In 2018, as part of the inception of the current Grand Coalition, a deal was struck to ensure Germany would hit a target of 65% renewables by 2030 as well. Indeed, today green electricity is regularly over 40%—and often higher. But that’s far from enough as overall greenhouse emissions, along with temperatures, continue to rise.

A recent poll by ARD-Morgenmagazin suggest some 63% of Germans now say protecting the climate should have priority over economic growth. That sentiment has been echoed in ballot boxes as the Green Party gains more power on both state levels and nationally (Sachsen just decided upon a three way Green-CDU-SPD state government).

However, as onshore wind energy expansion stalls and brown coal mines expand, many feel the hamstrung government is only kicking the troublesome Energiewende-can down the road, leaving the increasing mess to future governments and future generations. This sentiment helped send more than 1.5 million Germans marching through the streets in hundreds of towns and cities as mass Fridays For Future demonstrations were held worldwide. Another half million-plus marched the following Friday as global FFF actions during the week attracted more than 4 million protestors.

Nevertheless, Merkel continued to divert attention away from her government’s negative rates of progress while praising the activists and repeating palliatives on the necessity of climate action. “Something that impresses me as a scientist is when Greta Thunberg (the initiator of the Fridays for Future protests) says ‘unite behind the science.’ We’re not doing something ideological here, but something for which there is massive evidence and which we need to counteract,” she soothed at the press conference. However, “what distinguishes politics from science and impatient young people is that politics is what’s possible. And we’ve sounded out the possibilities.”

Calling the new strategy “disastrous,” the German branch of FFF tweeted “It’s a bad joke that the government praises us at the beginning of each statement and then tries to sell us decisions that further trample upon our future.”

Market solution fairy tales

“We would have wished for a higher CO₂ price, but it’s a good compromise,” said Environmental Secretary Svenja Schulze (SPD) at the press conference. Of course, it would have been easier to reach targets with a more ambitious price, she added, but given the struggle to enact a CO2 plan, “I’m happy that the whole government is behind it,” she continued.

Though she was pleased, seeming no one else was. Almost all energy and climate experts had urged the government to put a price on carbon at least on par with the current EU Emissions Trading System (€24/tonne), with many, including think tanks like Agora Energiewende, calling for a price above €50.

Instead of being a deterrent, Martin Kaiser, the director of Greenpeace Germany, said the price is “ridiculously low” and will remain “completely ineffective for another ten years” as the pump price of petrol and diesel is set to rise only by three cents in 2021.

Green Party co-leader Robert Habeck in an interview promised that the Greens would try to hammer out a stronger climate action plan through their enhanced influence in the Bundesrat. His counterpart, Annalena Baerbock told news agency dpa that her party “will keep petitioning for a true transition in the transport sector and an end to the fossil combustion engine.” Calling the policies deeply disappointing, in a written statement she feared they amount to an actual “withdrawal from the Paris Agreement.”

In the days since, the former Climate Chancellor’s CDU party has continued to reduce its climate ambitions (more on this to come). As her shrinking sense of possibilities cause the crisis to actually worsen, protestors suggest she should expect resistance.



L. Michael Buchsbaum is an energy and mining journalist and industrial photographer based in Germany. Since the mid-1990s, he has covered the social, environmental, economic and political impacts of the transition from fossil fuels towards renewables for dozens of industry magazines, journals, institutions and corporate clients. Born in the U.S., he emigrated to Germany and Europe to better document the Energiewende. He is also the host of The Global Energy Transition Podcast.

1 Comment

  1. James Wimberley says

    “Much of the anticipated future emissions savings through 2030 and beyond are based upon the assumption that this pollution will be sucked up and sequestered into currently unproven carbon capture and storage (CCS) technologies.”

    Germany spends €1.3 bn year on energy research. How much of this is going into the long-shot but scientifically sound ideas that have been put on the table: olivine weathering, biochar, basalt on farmland, deep basalt injection; seaweed farming and dumping? Industry pushes BECCS, which looks very much like a relabelled version of the expensively failed coal flue gas recovery experiments. Large-scale reafforestation is technically possible with a Stone Age technology of pointed sticks, the difficulties are social and political, see Bolsonaro. I favour gunboats up the Amazon but Merkel won’t.

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