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What a coal phasout in Germany would (not) mean

Economics Minister Sigmar Gabriel railed against “green illusions” this week at a Dena press conference that Greenpeace protesters tried to disturb. But neither Gabriel nor Dena correctly describe what Greenpeace and others calling for a coal phaseout want.

Gabriel has always been feisty – and often wrong in inexplicably embarrassing ways:

This last statement is all the more bewildering since no one – and certainly not Greenpeace – is calling for a coal phaseout to be completed during the nuclear phaseout (the last four nuclear plants will be shut down at the end of 2022). But Gabriel began improvising when Greenpeace took the stage in a press conference at the German Energy Agency Dena (video in German). To be fair, he is probably pumped with adrenaline when Greenpeace disrupts his speech. And he clearly enjoys his greater power. “I have the mike,” he says with a laugh at a member of Greenpeace in the audience.

When he equates a coal phaseout with the nuclear phaseout by 2022, Greenpeace objects, but Gabriel is louder: “Then give me a poster reading ‘coal phaseout by’ with a clear indication of a year,” he tells a Greenpeace member in the audience – as though Greenpeace didn’t have clear position on its website (in German): lignite phased out by 2030, hard coal by 2040. (Dena itself also seems to mistakenly think “coal phaseout” means “by 2022”: “By 2022, when the last nuclear power plant goes offline, we would have a power shortfall without coal plants.”)

 “You want a policy that would lead power prices to rise further…. but we already have a hard time keeping energy-intensive companies in Germany,” Gabriel says. Yet, his government isn’t able to name a single firm that has left Germany because of energy prices. I can’t either. BMW didn’t, nor did BASF. Now, Gabriel says the chemicals sector is investing less in Germany, a slight modification of the theme. Maybe we will have to start trying to collect such examples…. Nonetheless, Gabriel (and his Undersecretary Baake) equates the Energiewende with deindustrialization.

VIK June 2014
 - The VIK Index of industry prices shows that German industry now pays prices that are at the same level as those from 2005 – without being adjusted for inflation.
The VIK Index of industry prices shows that German industry now pays prices that are at the same level as those from 2005 – without being adjusted for inflation.

Otherwise, the former Environmental Minister seems concerned not to take any responsibility for the current state of affairs: “We should have figured out a new market design four or five years ago” (Gabriel left office five years ago). He also speaks of “four to five years of Germany blocking a reform of emissions trading.” This argument is pointless because emissions trading cannot be fixed at present; the backloading debate showed that you cannot simply remove allowances further. Campaigners like Greenpeace are therefore looking for ways to fix the problem because emissions trading cannot be changed this decade, as Gabriel knows (but does not say). By asking Greenpeace why it doesn’t call for emissions trading reform instead of a coal phaseout (note: Greenpeace did and does support carbon trading reform), he is essentially saying, “Let’s talk about a solution that is definitely unrealistic, not your attempt to see what can still be salvaged.”

In an especially pernicious turn, Gabriel then resorts to the waterbed argument: Germany only shifts carbon emissions abroad if it reduces them at home. Taken to its logical conclusion, Gabriel is saying that Germany should be allowed to dig up all of its lignite and burn it if it is the cheapest alternative. Consuming it also conflicts with the IEA’s “unburnable carbon” message: two thirds of our current reserves must be left in the ground. Germany’s contribution is two thirds of its lignite.

Gabriel increasingly seems to be twisting his critics’ arguments and making up problems that do not exist. Gabriel says he want to protect jobs, but no one is after them. He opposes Vattenfall backing out of lignite, but the most likely buyer is Czech utility CEZ, which would continue operations, and no jobs would necessarily be lost. He later refers to oil plants being switched on in Austria to power Bavaria as though it were characteristic of the Energiewende, not something that happened once in December 2011 and once in January 2013.

“Stop simplifying everything,” Gabriel tells Greenpeace. “Stop lying to people. Illusions just disappoint people.” But then comes to most unbelievable part: “I am certain we will reach our carbon emissions target.” The Berlin-based think tank Agora Energiewende recently argued that Germany will not reach its 2020 target for lower carbon emissions without reducing coal power (in German); in our paper on the German coal conundrum, Arne Jungjohann and I disagree a bit, arguing that Germany needs to focus on transport and heat as well. But no matter, Gabriel is doing neither; he’s focusing on protecting an industry that increasingly benefits from lower power prices – and therefore increasingly needs less and less protection.

Industry power prices EU
Petite Planète

(Craig Morris / @PPchef)