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Overview of the Plan

On September 20th the German government announced a $60 billion plan to drastically reduce greenhouse gas emissions. While environmentalist protesters participated in the global climate strike on the streets outside, chancellor Angela Merkel’s government agreed on a bundle of climate policies intended to get Germany back on track in reducing its emissions. These new policies were spurred largely by public frustration with the government for falling far short of the 2020 emissions target. Environmentalist groups such as Fridays for Future and Extinction Rebellion have long criticized Angela Merkel for her climate policies, arguing that they accomplish too little, too late. Since Merkel became chancellor in 2005, emissions have barely decreased (Graph 1, BNN Bloomberg). The new 2019 climate plan is meant to accelerate sustainability initiatives, making up for past inaction, but many Germans worry that the policies included in the plan will not be effective enough.

Dependence on Fossil Fuels

Last year renewable energy sources overtook coal as Germany’s main energy source for the first time. However, the country is still heavily dependent on fossil fuels, such as petrol, coal, and heating oil. Germany ranks second globally in exports, and its top two exports are cars and vehicle parts, accounting for $158 billion and $64.1 billion in revenue. Its top imports are also cars and vehicle parts, costing a total of $102.1 billion (OEC). In a country so economically and culturally dependent on automobiles, it is difficult to imagine a future free from fossil fuels. Germany has been gradually phasing out nuclear and coal power, but both are still heavily ingrained in the country’s infrastructure and culture. Protest group Ende Gelände (“Here and No Further”) has been occupying the coal mines in an attempt to steer Germany away from coal and towards renewable alternatives. They have certainly brought attention to the issue, but many coal mines are still in operation (EuroNews). While renewables have gained traction in Germany, the country still has a long way to go in relinquishing its dependence on fossil fuels.

Addressing the Fossil Fuel Problem: Certificates

Germany’s new climate plan sets the bar high, pledging carbon neutrality by 2050. Achieving this goal will mean decreasing fossil fuel use significantly. The climate plan aims to accomplish this through a carbon certificate program. This forces companies that produce and sell petrol, coal, heating oil, and other fuels to buy certificates to offset the carbon emissions from their products (Financial Times). Europe already has a certificate program, the European Emission Trading System (ETS), but it only applies to heavy industry, aviation, and the energy sector. This extension to fuel production companies is meant to accelerate Germany towards carbon neutrality. However, the plan has been criticized for setting a carbon price that is much lower than the EU price. Many assert that the price, which starts at €10 per tonne in 2021 and will rise to €35 by 2025, will barely put a dent in Germany’s carbon footprint, but others argue that a low price is favorable to no price (Climate Change News).

Addressing the Fossil Fuel Problem: Carbon Tax

In a further attempt to put a price on carbon, the German government will be implementing a carbon tax for certain carbon-emitting activities. In order to incentivize citizens to make more sustainable choices, Germany will be taxing airfare and heavily polluting cars. Additionally, rail travel will be made cheaper through a tax cut which will be compensated for by the increased tax on air travel. Furthermore, the government will be installing charging points for electric vehicles across Germany. Finance minister Olaf Scholz stresses that the additional spending included in the climate plan will be funded by tax revenues from the carbon pricing policies (Financial Times). Some Germans worry that carbon taxes will disadvantage poorer citizens who would struggle to pay the increased prices, but lack alternatives. However, most Germans agree that action must be taken urgently to reduce the country’s emissions in the face of the climate crisis.

Prospects for the Plan

Public response to the plan, which was announced in late September, was overwhelmingly negative. Environmental activists argued that small measures such as taxes and monetary incentives for sustainable alternatives are an inadequate response to the climate emergency. From a different angle, economists criticized the proposed carbon prices, deeming them too low to actually reduce emissions. Additionally, various industries and union leaders feared the changes would hurt jobs and businesses. Across the board, citizens saw little hope in the plan, and were skeptical of such an expensive change in policy (Bloomberg). A week after the plan was released, polls showed that 53% of the German electorate don’t consider the climate plan to be sufficient, and merely 20% believe it is adequate to combat climate change (Deutsche Welle). Furthermore, polls also suggest that German voters now prioritize the environment more than they do economic wellbeing (Bloomberg). All factors considered, Germany could benefit from a reformed climate plan. However, motions to combat climate change are favorable to none at all, and the new policies could turn out to make more of a difference than expected.

Sources

https://www.ft.com/content/26e8d1e0-dbb3-11e9-8f9b-77216ebe1f17

https://www.bnnbloomberg.ca/germany-revives-underground-carbon-capture-plan-in-sign-of-climate-struggle-1.1261430

https://www.euronews.com/2019/06/21/thousands-of-protesters-occupy-german-coal-mine

https://oec.world/en/profile/country/deu/

https://www.climatechangenews.com/2019/09/20/germany-announces-host-new-measures-bring-co2/

https://www.bloomberg.com/news/articles/2019-09-21/merkel-s-climate-deal-will-cost-billions-but-everyone-hates-it

https://www.dw.com/en/does-germanys-weak-climate-plan-reflect-a-polarized-public/a-50681461