Germany needs an exit plan from coal | Business| Economy and finance news from a German perspective | DW | 30.06.2015
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Germany needs an exit plan from coal

Germany has committed to shutting down the last of its nuclear reactors by 2022. Now an expert panel says the country needs a long-term plan to shut down its coal-fired power plants, too. It's hugely controversial.

The German government is set to decide on Wednesday whether or not to implement a "climate levy" on especially dirty coal-power plants. The move comes after a seven-member advisory panel on environmental policy - all professors in disciplines ranging from energy technology and toxicology to law - presented a report on Monday recommending that the German government initiate a process to decide how best to shut down all of the country's coal-fired power plants by 2040.

"If the goal of keeping global warming below two degrees is to be pursued seriously, it's unquestionable that the great majority of global coal reserves will have to stay in the ground," the report said. "The politicians' task is therefore to establish appropriate policy frameworks to ensure that the limited remaining global greenhouse gas emissions budget that's consistent with the two-degree limit isn't exceeded."

Berlin Demonstration - VerDi und IGBCE unions against climate levy

Two major unions, Verdi and IGBCE, demonstrated against the proposed "climate levy" in Berlin in April 2015

No future for nuclear - or coal

With solar and wind power set to provide the bulk of electricity supplies in future, there is, in the long run, "no room for baseload power plants like nuclear and coal-fired power plants that have to be run at full power for technical or economic reasons," the report said. The country needs to transition to an electricity grid powered largely by renewable energy, with gas-fired turbines and energy storage units serving as load-balancers.

Germany is much praised for the rapid growth in wind and solar electricity generation it has experienced in the past fifteen years, thanks to its progressive - but expensive - feed-in tariff policy. But it still produces 43 percent of its electricity by burning coal, the dirtiest fuel. Moreover, nearly all its transportation remains fossil-fuelled, except for some electrified trains and a small number of electric vehicles. The country remains a very long way from the zero-carbon future it aspires to achieve by mid-century.

Consensus instead of conflict

The report, entitled "10 theses on the future of coal to 2040", offered a key message: The German government should learn a lesson from the highly politicized path the country took in the decades-long process that culminated in a broadly supported, all-party decision to leave nuclear power behind - a lesson about how not to proceed.

To minimize future conflicts, the government should invite all the key stakeholders to develop a path out of the coal-power era, the panel suggested. The aim: A coal-power exit plan that can be carried by a broad social consensus.

That will mean looking after the concerns of coal-industry workers, corporations, and electricity consumers as well as environmental campaigners - while still doing justice to the climate-science-driven global carbon emissions budget, which is very quickly being used up by massive world-wide coal, oil and gas combustion.

Greenpeace demo at Garzweiler

Greenpeace and other eco-groups have held counter-demos in Berlin

Massive demos, controversial policies

The advice is well-timed. In March, Energy and Economy Minister Sigmar Gabriel put forward a proposal to levy a special tax, or "climate levy", on power plants that emit more than a cutoff level of carbon dioxide per MWh electricity produced. Its effect would be to financially penalize older, dirtier, less efficient coal-fired power plants - especially those running on lignite, or "brown coal," the dirtiest of all fuels.

Gabriel is also leader of the Social Democratic Party (SPD) - the junior partner in the current coalition government, so his policy proposals carry a lot of weight. Despite that, the climate levy proposal immediately ran into heavy opposition from two special interests - the corporations that own and operate lignite-fired power plants, and the unions representing lignite miners and power plant workers.

Their opposition also carries a lot of weight, because a few regions of Germany - regions which tend to vote SPD at election time - are heavily dependent on lignite mining for jobs and revenues. Unions representing lignite workers staged massive demonstrations in Berlin after the March policy announcement, and environmental campaigners staged massive counter-demonstrations. In Germany, climate policy is serious business.

Garzweiler lignite strip mine

The lignite strip mine at Garzweiler in North Rhine - Westphalia is among those anti-coal activists have targetted for closure

Gabriel's 'climate levy'

- which is why the seven-professor panel's report came at an opportune time.

The panel endorsed the climate levy, but with a caveat. "The climate levy proposed by the Energy and Economics Ministry ... goes in the right direction, does not conflict with the European emissions trading system, furthers appropriate structural changes in the nation's power generating capacity, and offers a chance to efficiently close the gap between current emissions trends and the national emissions target for 2020," the report said. Not only that, "The levy's macroeconomic effects are minimal."

In short: the levy is a good interim step, but it isn't enough. The proposed climate levy "does not replace ... the necessary debate on an effective long-term policy instrument with which the climate goals of the German government to 2050 can be reliably achieved."

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