Germany’s Industrial Heartland State Adopts Climate Protection Act

The German federal state of North Rhine-Westphalia (NRW), which includes the Ruhr area, Germany’s old industrial heartland, this week adopted a climate protection act. NRW is responsible for 1/3 of German greenhouse gas emissions, produces 30% of the electricity consumed in Germany, accounts for almost 1/4 of Germany’s gross energy consumption and 40% of national industry consumption. According to the new act, NRW will reduce its emissions by at least 25% below 1990 levels by 2020 and at least 80% by 2050, making it the first German climate law with emission targets. The NRW government argues that the 25% target is compatible with Germany’s 40% target as when the NRW target was first formulated in 2010 both NRW and Germany as a whole needed to reduce their emissions by 18% by 2020, from -7% to -25% in the case of NRW and from -22% to -40% in the case of Germany as a whole.

In the next step, the government will develop a climate protection plan with the involvement of all social groups. The plan is to be adopted by the state parliament this year and to be updated every five years. An expert committee will be established to monitor compliance with the targets and advise the state government in the elaboration and future development of the climate protection plan.

The law is hence strongly modeled on the UK Climate Change Act, but in contrast to the UK it was not adopted in an all-party consensus, the Christian Democrats (CDU) and the Liberal Democrats (FDP) voted against, citing potential negative impacts on industry and employment. They also argued that the Act would not lead to additional emission reductions as due to the EU emission trading system reductions in NRW would simply lead to emissions being shifted elsewhere. The Social Democrat-Green governing coalition is confident that the act will create hundreds of thousands of new jobs in the clean energy and other sectors.

In other news on the Energiewende, investment bank UBS has predicted that the arrival of socket parity – the cost of installing solar falling below the cost of buying electricity from the grid – will lead to a boom of unsubsidised solar. They see a potential of 80 GW of unsubsidised solar in Germany alone and expect that 43GW of unsubsidised solar could be installed in Germany, Italy and Spain by 2020. UBS estimates that as a result the load factor of German lignite plants will drop from 72% to 59% and the load factor of hard coal plants will drop from 47% to 31% by 2020.

There’s also good news from the other side of the globe. In Australia, emissions from electricity generation have dropped by 8.6%, thanks to the newly introduced carbon tax and rapid ramp-up of renewables. Funnily, since it’s a Murdoch outlet, the headline of the news article notes that this will lead to less carbon tax revenue rather than highlighting the positive. But I wonder what the impact is going to be once Australia transitions to a cap-and-trade system in 2015 and will start buying EU allowances, prices of which are currently much lower than the level of the Australian carbon tax. Is the EU going to ruin a successful Australian policy instrument?

Clean energy generation alone will not be sufficient to decarbonise our energy systems quickly enough, there is also a strong need for drastically improving energy efficiency. My Wuppertal colleagues Stefan Lechtenböhmer and Stefan Thomas recently published on online article where they discuss the so-called rebound effect, additional energy use induced by energy savings. In their view, the different forms of rebounds eat up at maximum 25% of the savings. They also point out that in many cases rebounds could more appropriately be termed co-benefits, as they consist of more comfort, alleviating energy poverty etc. But complementing efficiency with sufficiency – not having more than is actually needed – does of course help, even in a super-efficient house having 40 m2 per person consumes less energy than having 60 m2 per person. They also discuss policy options for countering rebounds, such as annually increasing energy taxation in lockstep with increasing energy productivity.

Meanwhile, I still don’t know what to make of the news coming out of the US. John Kerry, slated to become the new US Secretary of State, this week told the Senate Foreign Relations Committee in his confirmation hearing that climate change would be one of his priorities, that he would be a “passionate advocate” for climate action, that the US had better go after the six trillion dollar market in clean energy and that the would proactively engage with China. I guess we’ll see how serious he actually is in the upcoming decision on the Keystone pipeline.

And the pseudo climate skeptics in the US are sure not letting up the pressure. The Independent has uncovered another instance of fossil fuel billionaires secretly funneling millions of dollars into campaigns to cast doubt on climate science.

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