Madness by Design: A Voluntary Climate Fee with No Climate Effect

It’s really gone that far: Sigmar Gabriel’s already minimal attempt to save Germany’s 2020 climate target of reducing emissions by 40% compared with those of 1990 has been so watered down that it is barely recognizable as a climate policy. The online magazine Klimaretter (‘Climate Savers’) presents a wonderfully thorough analysis of Federal Ministry of Economics and Technology (BMWI) current working paper.

What is astonishing is how a policy instrument that originally was intended to shut down the dirtiest lignite power stations has morphed into a proposal that aims to prevent even a single decommissioning! A capitulation like this cannot be explained by the power of the coal lobby alone: Such a thing does not happen without the knowledge and connivance of the Chancellery. No signs remain of the ‘Climate Chancellor’ that Merkel impersonated at the Petersberger Climate Dialogue.

The most important proposed changes to the current draft include:

  • Significantly raising the deductible amount of CO2 emissions – from 3 to 3.8 million tons of CO2 per gigawatt of installed capacity.
  • Linking the voluntary climate fee to the price of electricity. As Jörg Staude of Klimaretter comments: “The Federal Government is ensuring that, thanks to recently adopted changes, in 2019 at the latest – if and when the emissions trade gets going – the impact on domestic coal power stations will be cushioned. Or dropped altogether. That is because, as is clearly noted, under certain conditions, above certain price levels for electricity and CO2 emissions certificates, the climate contribution could be nil.”
  • ‘Detailed regulations’ are supposed to ensure that “in atypical constellations the voluntary climate fee will not lead to shutdowns” says Jörg Staude. “Here the madness is by design: Transporting lignite such a long distance is really a losing bargain in terms of energy performance. But politically it will be allowed.”
  • Keeping 1 to 2 gigawatts of lignite in the capacity reserves, if need be.

The outcome: The voluntary climate fee will no longer save 22 million tons of CO2  – but rather only 16 million. The rest is to be saved by cogenerating heat and power and by counting on the transport sector (through such novelties as ‘e-highways’!).

This raises a lot of questions! Here are just a few of them:

  • Why have the additional potential savings in other sectors not yet dawned on Mr. Gabriel before he drafted the proposal?
  • Why should we rely on such an uncertain instrument as emissions trading for such an important policy goal?
  • Why is the non-decommissioning of climate killers an explicit policy goal?

Oliver Krischer’s (Green MP)  ironic commentary seems very apt here: “It seems to be just a matter of time until the CDU/CSU-SPD government will also want to take into account the CO2 savings from electric toy racetracks so that lignite power stations will be able to continue operating. In the end, the interests of RWE and Vattenfall with their antique coal-fired units are more important than protecting the climate.”

By the way: The trade union IGBCE, representing the interest if the coal workers, has proposed to introduce  a “scrapping bonus” to replace old oil-based heating systems in homes with more efficient ones that use natural gas – and to get rid of the climate fee all together.