Source: Ember/Agora Energiewende

The public discourse about the energy transition tends to focus on the additive side: can we add enough wind turbines so that they produce a quarter of our electricity? From a climate protection point of view, however, it is the subtractive side of the transition that is relevant. The objective is to avoid burning fossil fuels, and it doesn’t matter to the atmosphere whether we do so by running the dryer on renewable power, making it more efficient, or not turning it on at all.

It’s a bit like tobacco, another product we burned for a long time before we were aware of the health effects. You might have no hope of giving up cigarettes unless you exercise, meditate, or vape. But doing all of those things, as nice as they might be, will do little to reduce your risk of lung cancer if you still smoke a pack a day.

This irksome fact—that we need to stop consuming still-valuable resources—is what makes the low-carbon energy transition different from previous transitions and coal exits such an important part of EU climate policy.

Coal’s Dying Embers

The good news is coal is on the way out in Europe. In 2019, wind and solar generated more electricity than fossil fuels for the first time ever, as EU-27 power plants burned 339 million tons of coal, down from 586 million tons in 2012. The pandemic-blighted year of 2020 has seen a further drop, with EU coal power generation down nearly a third thanks to a mild winter, low demand during lockdown, and the falling cost of renewables.

Though the trend line is clear, the Europe-wide statistics mask major differences between countries. Sweden, Austria, and Belgium have already closed down their last coal power plants. Coal is increasingly irrelevant for power production in the United Kingdom, Italy, and France, which all plan to quit coal completely over the next few years. Lagging behind are Slovenia, Bulgaria, Greece, and the Czech Republic, which all generate a sizable share of their electricity from coal but do limited damage to the climate because of their relatively small economies.

Then there’s Germany and Poland. Each generated about as much electricity from coal as the rest of the EU combined in the first half of 2020, and each plans to burn coal for many years to come.

The Kohleausstieg

In July, Germany adopted a law to ensure the end of coal power by 2038 at the latest. Unfortunately, the Kohleausstieg will happen so slowly that it is incompatible with the Paris Agreement goals—to reach those targets, the German Institute for Economic Research found, Germany would have to quit coal by 2030. Critics also argue that the law will give power companies too much compensation for running coal-fired plants that won’t be profitable anyway.

On the other hand, the process has been a shining example of how to steer and manage the decline of an important industry, with power companies, coal miners and coal regions, and a majority of the Bundestag able to reach a compromise. The €40 billion set aside for coal-dependent regions is a sign that the government realizes the scale of the job. And the coal exit could go faster in the end: the German Federal Network Agency, for one, expects it to be wrapped up by 2035. An expensive date that arrives too late is better than none at all.

Light at the End of the Mine

Poland has set no date for its coal exit. Deputy Prime Minister Jacek Sasin recently said, “We believe that Poland’s dependence on coal energy will come to an end in 2050 or even 2060,” a timeline that makes Germany’s plodding exit look like a hundred-yard dash.

While the nationalist-conservative PiS government is especially close with the coal industry, politics is not the only obstacle to rapid change. Poland is wary of replacing some coal with Russian gas (as Germany has done) and also has no nuclear power plants (a soon-to-be-realized German objective). Ahead of the 2019 parliamentary elections the biggest opposition group, the European Coalition, proposed 2040 as an end date for coal. It appears Poland’s coal replacement will be a slow one, whoever is in charge.

It’s not as if Polish decision-makers are unaware that the future for coal is not bright. The CEO of state-owned coal giant PGG, Tomasz Rogala, admits that “the situation is critical.” The Ministry of State Assets, which Sasin leads, reportedly planned to introduce a restructuring plan for PGG in late July. The plan would have closed several loss-making mines this year, temporarily cut miners’ salaries, created a fund for miners who quit to receive retraining, and perhaps even set a coal exit date of 2036.

In the face of pressure from powerful trade unions, however, the government had to walk back its restructuring plans. (Poland is going ahead with a plan to combine its three utilities in two groups, one for coal and one for non-coal energy, which could pave the way for more changes to come.) It now wants to set up a commission, including union representatives, to find a solution acceptable to all.

Coal miners will benefit from the government’s recent creation of a strategic reserve of hard coal worth €30 million, the latest installment of state support for an industry that has come to rely on it. Polish miners are having to dig deeper and deeper to access coal, which makes it more expensive. In fact, Polish firms have been importing huge quantities of Russian coal because it is cheaper and higher quality, quite a contradiction for a country with such concerns about becoming dependent on energy from the east.

Angry Neighbors

Higher costs for mining, pressure from citizens upset about foul air—in 2016 Poland had 33 of the 50 most polluted cities in Europe—these are the internal forces working against the Polish coal industry. But there is external pressure too, mostly from Brussels. The rising cost of EU emissions permits over the last three years has only added to coal-fired plants’ expenses. And one reason that Polish utilities have risked miners’ fury to import Russian coal is because its sulfur content is low enough to comply with EU regulations, unlike the Polish stuff.

As European climate regulations get stricter and the EU budget gets larger, these external pressures will grow. For instance, according to the EU budget and recovery package agreed last month under Germany’s EU Council presidency, Poland will receive only 50 percent of the funds it is eligible for under the EU’s €17.5 billion Just Transition Fund because it has declined to sign up to the EU goal of net-zero emissions by 2050.

Missing out on a small share of that money, meant for the EU’s most vulnerable fossil fuel-dependent regions, won’t fundamentally change the coal equation for Polish leaders. Yet the fact that the EU is making some funds conditional on climate action (if not adherence to the rule of law) sets a precedent that could be costly for Warsaw. If the EU approves the European Commission’s proposal to increase the 2030 emissions reduction target from 40-55 percent, Poland would have real difficulties meeting its obligations.

Unsatisfying Council Conclusions

By the time of the next EU budget negotiations in 2027, coal will face an even more unfavorable environment. EU politics will be even more Europeanized, perhaps even with transnational lists for European Parliament candidates. The next budget will likely represent a bigger share of member-share revenue and be more conditional on climate action—and pressure from international bodies and trading partners will weigh heavier too.

We could even look ahead to Germany’s next European Council presidency, sometime around 2034. Greta Thunberg will be 31, the next generation of youth climate activists will be even less compromising, and EU consumers will demand more information about the carbon footprint of their products. Poland and Germany, however, will still be burning coal for electricity. Coal may be in decline in Europe, but there is still a lot of work to do to ensure we aren’t having the same debates about coal exits in seven years, or in fourteen.

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© REUTERS/Edgard Garrido

With much of the world being told to shelter in their homes, air pollution has fallen so dramatically that satellites can pick it up from space. Cleaning up the air in China has likely saved tens of thousands of lives. The people of New Delhi—some of whom wore masks before the pandemic to keep out the smog—haven’t seen such a clear blue sky in decades. The lockdown has cut energy use and thus carbon emissions, too: Germany produced more than half of its electricity from renewables for a three-month period for the first time ever.

This is good news at a bad time. Unfortunately, though, bringing the world to a halt is not a great model for averting climate change. Human activity is responsible for greenhouse gas emissions and air pollution; if you indiscriminately restrict human activity, you reduce both. Put another way, if everyone who owned a red car were thrown in prison, carbon emissions would fall, and there would be fewer deaths from car accidents. It would still be, it is fair to say, a very stupid idea.

The main takeaway from this (temporary) reprieve for the climate is that individual action and self-restraint is a sideshow to the main event of decarbonization.

Not Even If We All Stay Home

It’s hard to say by how much the coronavirus will reduce global CO2 emissions in 2020—these days, economic forecasts from just a few weeks ago already look ridiculous. But the best early estimates are of a huge drop.

Forecasters had expected global carbon dioxide emissions to rise by about one percent this year in the absence of a pandemic. Zeke Hausfather and Seaver Wang of the Breakthrough Institute estimated in late March that emissions might fall by one or two percent “assuming the global economy recovers in the third and fourth quarter.” Rob Jackson of the Global Carbon Project told Reuters he wouldn’t be shocked to see emissions fall by five percent. Simon Evans of Carbon Brief thinks emissions might fall by 5.5 percent this year. In the most pessimistic economic forecasts, GDP collapses to such an extent that emissions could fall by as much as ten percent.

Let’s say emissions decline by six percent. That would be unprecedented in modern times. The last time emissions fell year-on-year was during the global financial crisis, when they declined by 1.2 percent from 2008 to 2009. Energy crises and recessions have reduced emissions several times in the past fifty years, notably 1980–81 and 1991–92, but never by six percent. You have to go back to the first half of the 20th century to see changes this dramatic: 1918–19, for instance, emissions fell by about 13 percent as the Spanish flu pandemic struck a world still reeling from World War I, according to Glen Peters of the research center CICERO.

A decline of six percent would also be insufficient to limit global warming to 1.5 degrees Celsius, even if this were the sort of sustainable change that people could repeat again and again, locking themselves down each spring. In order to reach that probably unattainable Paris Agreement target, the UN says, global emissions need to fall by over 7 percent each year for the next decade.

The arithmetic is dispiriting. The fact that an extraordinary, near-global temporary lockdown probably won’t do enough this year to flatten the emissions curve, if you will, should put into perspective the individual choices people make about taking a taxi instead of the subway. During the first full month of the lockdown, despite being trapped in their homes, the Chinese emitted three-quarters as much CO2 as usual. As long as most laptops and heaters still run on fossil fuels, emissions will be too high.

However long the lockdowns last, the atmospheric concentration of carbon dioxide will continue to rise. Climate scientists liken the atmosphere to a bathtub with a tiny leak: even turning the tap from full blast to a steady flow won’t stop the water level from rising. And this pandemic is absorbing money that countries might have used to fund decarbonization.

Beware of the Rebound

What’s more, after each previous downturn, emissions came back with a vengeance. 2010 saw the highest total annual growth in emissions ever recorded as governments injected money into their wounded economies, wiping out the climate gains (or rather emission reductions) of the previous year.

China in particular has financed huge expansions of carbon-intensive projects in response to economic crises. While these sometimes make it easier to cut emissions later on—China’s 2011–15 Five Year Plan expanded high-speed rail, for example—policymakers are primarily concerned to get the existing economy going after a recession rather than avert relatively distant threats. The 2011 Chinese stimulus also included massive spending on airports and coal-fired power plants.

There are signs that this pattern will repeat itself this time around. The Chinese government granted more permits for coal-fired power plants in February and March 2020 than in the same period last year and is reportedly considering relaxing emissions standards for automobiles. Already opposed to carbon regulations, the Trump administration recently relaxed US auto standards as well.

In Europe, neither side of the climate debate is wasting a good crisis. After all, this is an excellent chance to call once again for long-desired policies. The president of the German car lobby VDA, Hildegard Müller, wants Germany to relax its emissions standards, too. “This not the time to think about further tightening of the CO2 regulation,” she said. The industry lobby Business Europe has called on the EU to postpone “non-essential” climate initiatives, and Czech Prime Minister Andrej Babis believes “Europe should forget about the Green Deal now and focus on the coronavirus instead.” On the other hand, environment ministers from thirteen member states have written an open letter urging the EU to adopt a green recovery plan. For now, all of it has to take a back seat to the the urgent public health crisis and the bitter debate about debt mutualization.

Behavioral Change

A lockdown is very different from a typical recession, so some environmentally friendly behavioral changes will endure after the pandemic. More companies will allow and enable their employees to work from home. Some people will find that they are quite happy going to fewer conferences abroad. When the cars are back on the roads, the people tweeting incredulously about the clear skies above Los Angeles will have a new understanding of how dirty the status quo really is.

Perhaps, when it’s over, modern societies will have a new appreciation for their capacity to take collective action for the greater good and especially for the sake of certain vulnerable generations—or will at least support politicians who want to do the climate equivalent of expanding national stockpiles of protective medical gear.

But there’s also a risk that disaster fatigue sets in, that more people prefer to focus on fun, friends, and family for a while. Who could be blamed for skipping the next in-person Fridays for Future protest to fly off for a holiday?

Only one thing is guaranteed: on the day that a vaccine for the coronavirus is widely available, the only way to avoid climate catastrophe will be to make a collective effort to decarbonize the energy system. Just like it was before.

The post Carbon Critical: The Great Unwanted Climate Experiment appeared first on Berlin Policy Journal - Blog.

source: IAEA

They are the EU’s two largest member-states, the countries meant to drive European integration forward as the Franco-German motor. The problem is they don’t agree on which fuel to use.

France is a world leader in nuclear power, a low-carbon energy source. About 71 percent of its electricity comes from its 58 nuclear power plants. The state-owned energy giant EDF is building another one in Flamanville, Normandy, a plant that uses an improved “third generation” reactor technology, the European Pressurized Reactor. The average French person emits 7.2 tons of CO2 equivalent per year. Electricity in France costs €0.18 per kilowatt hour.

Germany has given up on nuclear power. It gets less than 12 percent of its electricity from nuclear, and that figure is falling: Germany plans to shut its remaining nuclear power plants by the end of 2022. The average German emits 11.3 tons of CO2 equivalent per year. Electricity in Germany costs €0.31 per kilowatt hour, nearly double the price in France.

The two countries’ differing positions on nuclear power mirror the divide within the EU and within the global environmental movement. As usual with the Franco-German motor, culture and history help explain the differences.

Is Nuclear History?

France made a big push to switch to nuclear power in the wake of the 1973 oil shock—at the time, most French electricity came from oil-burning plants. Because France has relatively small fossil fuel reserves, the idea of switching to uranium, a fuel so potent that one half-inch pellet of it contains as much energy as a ton of coal, had its attractions. There is a proud French tradition of large, centrally directed technological projects, like the high-speed TGV trains that were redesigned to run on electricity rather than gas in the 1970s. State-owned French firms have led the way in exporting technical know-how and building nuclear reactors abroad, and nuclear advocates around the world admire France’s practice of recycling spent fuel to reduce waste. Nuclear power has been broadly popular in France.

It is the problem of storing nuclear waste for the long term that has aroused the most opposition; support for nuclear has fallen over the past few years. A 2018 Odaxa poll found that 53 percent of French opposed nuclear power, up from 33 percent in 2013—though only 28 percent were willing to pay more for their energy to avoid using nuclear.

France, like every other country, is still seeking a permanent underground repository to bury its spent fuel in. It hopes to open one in 2022, but these dates are rarely set in stone: lawsuits from environmental groups and NIMBYs (Not In My Back Yard) have prevented the opening of storage facilities everywhere from the United States to Sweden. It appears that Finland will be the first country to open such a permanent repository, and it’s a good thing too. Regardless of how many new nuclear facilities humans build, the world needs somewhere to store existing radioactive waste, which is currently kept in increasingly overcrowded temporary storage, i.e. in deep pools of water until it cools, and then in casks of thick metal.

And Germany? Nuclear power used to be a big part of the German electricity mix too, peaking at about 30 percent in 2000, but there was always more public opposition east of the Rhine. There were major protests in 1979 after the (non-fatal) meltdown at a nuclear plant on Three Mile Island in New York, and the anti-nuclear movement was a major player in the formation of the Green Party the following year. Fears that Germany would be the battleground for nuclear war between the US and the Soviet Union, combined with the relative proximity of the meltdown at the dreadfully mismanaged nuclear plant in Chernobyl in 1986, did nothing to persuade a skeptical public.

Germany built no new plants after 1989, and the Social Democrat-Green government decided in 1998 to exit nuclear power by 2022. Then in 2011, the Bundestag roundly supported Chancellor Angela Merkel, who initially had wanted nuclear plants to run longer, when she made a U-turn after the nuclear disaster in Fukushima, Japan. A quicker end to nuclear power and a big shift to renewable energy, the so-called Energiewende, became the German consensus. Remarkably, the climate-conscious country will now end nuclear power production by 2022—the same year France will stop burning coal—but continue to burn dirty coal for electricity until 2038.

The upshot is that Germany’s impressive expansion of renewables over the last decade has not reduced emissions as fast as it could have, because one form of low-carbon energy has replaced another: before the coronavirus shutdown, Germany was on track to miss its climate targets for 2020. Although groups within Merkel’s conservative Christian Democrats (CDU) and the opposition pro-business Free Democrats (FDP) question whether quitting nuclear was the right move, the issue is dead and buried for much of the population, especially the ascendant, religiously anti-nuclear Greens.

The Price of Power

So France has cleaner, cheaper energy than Germany, though the story is more complicated than that—nothing about splitting nuclei is simple. Those cost/kilowatt hour statistics will have raised the hackles of people on both sides of the nuclear power debate. “How can one put a price on avoiding a Chernobyl-like nuclear disaster?,” a German climate activist might ask. “What is the value of getting out of nuclear energy if the result is higher dependency on Russian gas?” a French bureaucrat might retort.

Both would have a point. The fact that the price tag for energy does not reflect its true cost is central to the climate debate, indeed at the heart of it. Those figures do include the high taxes and fees Germany levies on electricity in order to support the expansion of renewables. But they do not fully capture all sorts of other costs, from the cost of emitting deadly air pollutants and greenhouse gases, to the cost of building a grid that can get renewable power where it’s needed on cloudy, calm days, to the cost of spreading around nuclear technology.

Reasonable people can have different opinions on the extent to which nuclear power should be part of a decarbonized future, and that’s exactly what’s happening with Germany and France, and with their allies within the EU.

Far from Atomized

This isn’t the usual split between “old” and “new” member states, or between the North and South. Spain, Italy, Belgium, and Switzerland have decided to ditch nuclear energy. Denmark, Ireland, Portugal, and Austria never had any commercial nuclear reactors. On the other side stand France, Poland, Finland, the Czech Republic, Slovakia and Hungary, as well as former member the United Kingdom, which all plan to build new reactors. Within the EU as a whole, renewable energy accounts for 14 percent of energy, nuclear energy for 12 percent.

This doesn’t mean the pro-nuclear camp thinks reactors are a silver bullet—even France wants to close some old reactors and increase renewable production so that nuclear power’s share of electricity generation falls to 50 percent by 2035. But some European leaders are determined that nuclear be a part of their low-carbon future. “Nuclear energy is clean energy,” Czech Prime Minister Andrej Babiš argues. “I don’t know why people have a problem with this.” The Czech Republic, Hungary, and Slovakia could only be persuaded to sign up for the European Green Deal in December 2019 because the European Council agreed to respect the “right of the member states to decide on their energy mix… Some member states have indicated that they use nuclear energy…”

Germany disagreed, as it had in September 2019 when EU ministers decided not to exclude nuclear from a sustainable finance classification scheme. “Nuclear energy is neither safe nor sustainable nor cost-effective,” said German State Secretary for Energy Andreas Feicht. “So we reject the idea of EU money to extend the life of nuclear power stations.”

Yet it was the German co-leader of the Green group in the European Parliament, Ska Keller, who broke from her party colleagues to vote for the November 2019 resolution declaring a climate emergency in Europe. Forty-six of her fellow Greens voted against the resolution because of a clause saying that nuclear energy could “contribute to the achievement of climate goals,” resulting in the strange optics of Greens rejecting a measure that for decades they could only dream of passing. Clearly, nuclear reactors have the power to split the environmental movement down the middle. 

The Wrong Enemy

One reason that decarbonizing energy systems is so hard is that it isn’t enough to simply replace all current fossil fuel power plants with low-carbon sources. The world needs much more than 100 percent of current electricity, for the millions of people in poor countries who struggle to access electricity, for the electrification of the automobile, for creating carbon-free hydrogen to heat homes.

It’s not for nothing that in every IPCC scenario for limiting global warming to 1.5 Celsius, nuclear power supplies more energy in 2050 than it does now. Nuclear has its drawbacks, especially the massive cost of storing waste. There’s no such thing as a free lunch with energy, however. Fossil fuels are reliable, but they are melting icecaps and clogging lungs. Modern renewables like wind and solar are ideal, safe energy sources, but today—nearly 30 years after the first UN treaty on climate change, as country after country misses its climate targets—they still account for only around 10 percent of total final energy consumption.

Perhaps the next generation of nuclear reactors—meant to be cheaper, smaller, safer, and standardized—will succeed beyond expectations, making nuclear energy the backbone of future low-carbon energy systems. For all the talk of China’s construction of coal power plants, the country is also building 15 new nuclear reactors. Nine years after the Fukushima disaster, Japan is restarting some of its nuclear reactors too.  Or perhaps nuclear will fizzle out as the cost of renewables and batteries continues to fall. After all, that French plant at Flamanville is even more over budget and behind schedule than Berlin’s long-delayed new airport.

The next generation of climate activists, who come to the issue with fresh eyes, might give nuclear another chance as the cost of the energy status quo gets higher and higher. Greta Thunberg has said she is “personally against nuclear power, but according to the IPCC, it can be a small part of a very big new carbon free energy solution.”

Good for Greta. Those concerned about climate change have a responsibility to watch carefully the development of nuclear power and make unbiased, evidence-based decisions. They must, to paraphrase Thunberg again, listen to the scientists, even when they don’t like the answer.

The post Carbon Critical: The Franco-German Nuclear Motor appeared first on Berlin Policy Journal - Blog.

Pictures © REUTERS

The global climate debate is entering a new phase. Whereas it was previously between “environmentalists” and climate deniers, with a large section of society watching on indifferently, in the new phase the issue is how to handle climate change, rather than whether it is worth discussing or doing something about. There are two main drivers of this shift.

The Death of Denial

First, climate denial is on its last legs. This might seem premature given that US President Donald Trump, who has called climate change “a hoax,” withdrew the United States from the Paris Agreement in 2017. The underlying trends, however, are not on the deniers’ side.

In a July 2019 global YouGov poll, just 15 percent of Americans agreed either that the climate was changing but “human activity is not responsible at all” (9 percent) or that the climate was not in fact changing (6 percent). Yet that was the highest number of all polled countries, and even Trump’s Republican party appears to be moving away from the president on this issue. In a September 2019 US Public Views on Climate and Energy poll, 52 percent of millennial Republicans agreed that the US “federal government is doing too little to reduce the effects of climate change.” These young conservatives might well describe the current US president as a boomer.

Indeed, in recent years the more intellectually honest climate deniers have simply run out of ammunition. Natural variability kept temperatures quite stable in the 2000s, but the last five years have been the warmest on record as atmospheric concentrations of greenhouse gases continue to reach new highs.

Second, the climate crisis is becoming a more salient political issue, and the public at large is becoming more passionate about it. The forests of California are aflame; Venice is underwater; the Victoria Falls have run dry. Youth activist groups such as Fridays for Future are real political forces, especially in Europe and the US. Just as importantly, typical voters truly care about their elected officials’ climate policy.

That was not the case previously. Although, compared to the US, deniers never played an especially large role in the European debate. Still, centrist leaders were able to treat climate issues as just another policy field. Tony Blair, Gerhard Schröder, and Jacques Chirac all urged the US to back the Kyoto Protocol, but when election time came, not many voters were talking about emission reduction targets, whereas the 2019 European Parliamentary elections demonstrated that climate was a key issue for all parties. In the 2020s, leaders of major political parties will no longer be able to brush the issue under the rug.

No Dodging of the Issue

Australian Prime Minister Scott Morrison makes a good case study. Morrison, a Liberal who won a close election having promised to protect coal and cut taxes, is the type of man who might have denied or ignored climate change in previous times. These days, he can’t, not when there are major climate conferences the public actually cares about—Morrison claimed at the September UN climate conference in New York that Australia is “doing its bit” on climate change—and not when there are frequent major climatic events, like the bush fires that devastated the country in November 2019.

After those fires, Morrison could not dodge the issue, nor argue that heat and drought are unrelated to fire. Instead he had to resort to a tangled defense that “Australia, accountable for 1.3 percent of the world’s emissions” could not be “impacting directly on specific fire events.” Even in the statement by US Secretary Mike Pompeo on the occasion of the US leaving the Paris Agreement there is no climate denial—Pompeo proudly cites America’s emissions-reduction record, lackluster as it is.

So climate denial as we knew it is passé, and the climate crisis is becoming impossible to ignore. Where does the debate go next? Like most conceptual categories, these are somewhat fluid—the same individual may move back and forth between camps, but here are the four main groups.

The Carbonists

First, there are the “Carbonists.” Robinson Meyer of The Atlantic invented the term to describe the successors to the climate deniers—the “carbon” is akin to the “nation” in nationalism. They are small in number, though they hold significant political and economic power. Carbonists do sometimes try to argue that climate science is incorrect, but they can quite easily make their point without doing so. Meyer writes: “Carbonism is a belief that fossil fuels … have inherent virtue. That they are better, in fact, than other energy sources.”

Carbonism is behind Donald Trump’s efforts not just to slow climate action but to roll it back, e.g. to reduce cars’ fuel efficiency against the will of large automakers and US states. At its core is a desire to pull up the drawbridge and protect the property of currently powerful groups, like those who control fossil fuel production or benefit most from the absence of taxes and regulation on carbon emissions, a group that in the West comprises mainly older white men. It frequently devolves into trolling—witness Brazilian President Jair Bolsonaro’s accusation that actor and climate activist Leonardo DiCaprio was responsible for fires in the Amazon.

This philosophy is not specific to the Americas. When Clemens Tönnies, meat magnate and chairman of the German football team Schalke 04, said that the real problem was not how wealthy Europeans live but the “Africans … producing children when it’s dark”, he was making a Carbonist argument.

A Far-Right Phenomenon

Some far-right parties in Europe still take the traditional route and deny the science, like Spain’s Vox, the Brexit party, and the Swedish Democrats. But others raise different objections to electric cars and vegan burgers. Former AfD party leader Alexander Gauland despises everything the Green party stands for. “Green ideology,” he has said, is “taking in strangers, saving the climate, helping others,” as opposed to standing up for “the people.” (Incidentally, the AfD also denies the science.)

The list goes on. The Danish People’s Party says wind power spoils landscapes, while Greece’s Golden Dawn argues that Greeks have a right to exploit their national fossil fuel resources. The leader of the True Finns says “climate change is a reality,” but warns that wind turbines are bad for human health.

Indeed, many Carbonists are obsessed with potential negative impacts of going green. For them, the cure is worse than the disease. How many of those writing op-eds about the water consumed in avocado production or the humans rights abuses often involved in cobalt mining (for lithium batteries) ever made a fuss about the water a cow drinks or the child labor that goes into Nestle chocolate?

The Lukewarmists

Next there are what British writer Matt Ridley has dubbed the “Lukewarmists.” These people accept the overwhelming evidence that the earth is warming and human activity is the primary cause. However, as self-described Lukewarmist and New York Times columnist Ross Douthat explains, they “doubt … that climate change represents a crisis unique among the varied challenges we face, or that the global regulatory schemes advanced to deal with it will work as advertised.”

Lukewarmists, who include German Chancellor Angela Merkel, are a diverse bunch. Some believe the effects of climate change are more manageable than the doomsayers claim, as least manageable for the well-off in wealthy nations. After the bush fires, Prime Minister Morrison underlined how his government had given more resources to the fire chiefs to put out the fires once they started.

Douthat, meanwhile, is skeptical of the Green New Deal in general but has praised the elements of it that seek to adapt the United States’ defenses. Adaptation is rightfully on the agenda nearly everywhere, be it nature-based measures like mangrove restoration or high-tech air purification towers, such as those the Indian Supreme Court recently urged the Delhi government to build to reduce smog.

Back to the Stone Age?

Climate change is a collective action problem, and Lukewarmists are quick to point that any country acting first or alone will incur major economic costs for relatively little reward if other parties don’t also act to cut emissions. Lukewarmists are also eager to minimize their own in-group’s responsibility, perhaps because their country or sector is responsible for only X percent of emissions (for instance, Germany: 2 percent; aviation: 2 percent). Or perhaps because fossil fuels are simply indispensable: Saudi Arabia has ratified the Paris Agreement but does not appear committed to meaningfully reducing emissions; BP is being sued in the UK for its “greenwashing” advertisements. Or perhaps because Greta Thunberg’s journey across the Atlantic was not technically entirely carbon free.

Other Lukewarmists complain that it would be too expensive to solve the problem. They warn that change cannot come too fast without either destroying the economy or alienating the population, pushing people to vote for Carbonists. Russian President Vladimir Putin said in November 2019 that a complete switch to solar and wind power risked “humanity once again ending up in caves.” According to Russia’s Public Opinion Foundation, 40 percent of Russians believe nothing can be done to prevent climate change. Though the cost argument tends to come from the right, some leftist parties or hybrid left-right movements make it too: the French Gilets Jaunes took to the streets in part to oppose a fuel tax increase.

The Techno-Mitigators

The next group are the “Techno-Mitigators.” They have a lot in common with Lukewarmists, particularly in their reluctance to disincentivize, restrict, or ban planet-heating activities. Yet they tend to take climate change more seriously than Lukewarmists and want to mitigate it with technology and human ingenuity.

Think of how the Republican US Senator Marco Rubio and Czech PM Andrej Babis advocate nuclear power. Or how Christian Lindner, leader of Germany’s pro-business Free Democrats, pleads for “innovative approaches” such as synthetic fuels or carbon capture and storage. Or of Carbon Engineering, a Canadian company backed by Microsoft founder Bill Gates that is working with the oil giant Occidental to build a plant in Texas that will suck carbon out of the air… and use it to drill for more oil.

Also in the Techno-Mitigators camp are those in favor of geo-engineering, e.g. solar radiation management. This is the practice of injecting reflective particles, such as sulfate aerosols, into the atmosphere, in order to reflect sunlight and thus reduce the amount of heat that reaches the earth, mimicking the effects of volcanic eruptions that have reduced global temperatures in the past.

China led by President Xi Jinping is something of a Techno-Mitigator by inference. It talks the talk on climate and is the largest developer of renewable energy, but it is also building enough new coal power plants to match the entire current coal capacity of the EU. This coal expansion is incompatible with the Paris Agreement. How will Beijing square the circle? The superpower that is already planning to launch the world’s largest cloud-seeding operation in order to increase rainfall in the Tibetan plateau might well continue to bet on technology in the long term.

The Alarmists

Alarmists are those who respond to reports of species going extinct and ice sheets melting by saying it is time to, well, sound the alarm. Greta Thunberg has been doing this very effectively in 2019. Alarmists are horrified by the fact that many G20 nations are on track to miss their climate targets for 2030, and that even if current climate pledges were implemented, temperatures would still rise by about 3 degrees Celsius. Alarmists believe that climate change is a unique, existential threat and governments must drive rapid transformation.

This group includes radical organizations like Extinction Rebellion and authors like Naomi Klein, who see capitalism as it exists today and climate change as part of the same crisis. In January 2019, 626 environmental groups sent a letter to US lawmakers that opposed “corporate schemes … including market-based mechanisms and technology options such as carbon and emissions trading and offsets.” But the Alarmist camp also includes most of the comparatively staid scientific community and many moderate Green or center-left politicians.

Sometimes people make Alarmist arguments for political advantage. The Guardian asked all major British parties the same set of questions about climate change ahead of the 2019 election. All agreed that “climate crisis” was the “biggest issue the UK faces as a nation.” Yet only the Conservatives opposed the youth climate strikes and said they would not stop the expansion of Heathrow airport.

Only those political parties that do not have a massive gap between their rhetoric and their proposals (if not results) can credibly argue the Alarmist point of view. Labour didn’t agree with the British Greens on everything in the survey, but its climate policies did get good marks on a Greenpeace test.

It will take a few years to tell how committed would-be Alarmists, including new European Commission President Ursula von der Leyen, are to their principles. The municipalities that recently declared climate emergency or pledged to go net-zero will have to demonstrate their seriousness in the 2020s. And many alarmist parties will face heavy friendly fire over their cooperation with other camps, on the grounds that, as Klein put it in This Changes Everything: Capitalism vs the Climate, “the solution to global warming is not to fix the world, it is to fix ourselves.”

Mix and Match

Unsurprisingly, the author of a column called Carbon Critical has a lot of sympathy for mitigators. One suspects that if more people read the UN reports of impending disaster, there would be more people on the Alarmist bandwagon. Nevertheless, every group but the Carbonists has something to offer.

Techno-Mitigators have a clear-eyed view of how bleak the situation is. Flight shaming or buying secondhand clothes can make a difference at the margins. There is, however, no way to meet the Paris Agreement goals without relying heavily on technology. Must we retire the safest existing nuclear power plants for ideological reasons?

When Alarmists such as Bernie Sanders or Friends of the Earth Europe write off carbon capture as a “false solution,” they overrate the danger of moral hazard, i.e. the risk that people will stop reducing emissions because they think technology can save them. They should listen to the IPCC, which acknowledges that all pathways for limiting warming to 1.5 degrees Celsius require the use of “negative emissions technologies.” Instead of writing these off, Alarmists should encourage advocates to put their money where their mouth is: how can we possibly build the equipment and infrastructure for carbon storage without proper market incentives?

Geo-engineering is risky stuff, even as a temporary solution to buy us enough breathing space to cut emissions. For instance, while solar radiation management would slow global warming, it would do nothing to stop other climate problems like ocean acidification, and it might have dangerous side effects like changing rainfall patterns. Yet it is quite likely to occur on a meaningful scale because it costs less up front to dim the sun than to quickly reshape economies. Scientists are working intensely on such technologies, especially in the US and China. Therefore it makes sense for all countries to do research into geo-engineering and strengthen international regulatory frameworks, rather than hope the technology is never used.

Lukewarmists, meanwhile, provide a healthy skepticism and realism. We will inevitably spend large sums on adaptation that, from a global, generational perspective, would be better spent on mitigation. And some Alarmist demands are divorced from political considerations. The German branch of Fridays for Future advocates a carbon price of €180 per ton. This number is the result of a German Environmental Agency calculation of the burden today’s carbon emissions put on future generations. But it takes no account of what Germany’s competitors are doing, what German voters want, or whether low-income groups could afford the tax, as Lukewarmists eagerly point out.

Alarmists’ task is to press Lukewarmists to follow these criticisms to their logical conclusions. They should not accept the hollow claim that raising taxes on meat or gasoline is necessarily an unacceptable burden on low-income groups, as if governments do not have the power to compensate workers by reducing other taxes. They should ask Lukewarmist politicians to borrow from future generations so that we can actually afford to make synthetic fuels and low-carbon steel and cement today. And they should encourage their leaders to play hardball with laggard nations, for example by implementing a carbon border tax to level the playing field and stop Carbonists from gaining a temporary economic advantage.

A Power Struggle for the 2020s

It is a sign of progress that the debate has moved on and split into four camps. Just five years ago, the chairman of the environment committee in the US Senate threw a snowball on the senate floor in order to “disprove” global warming. Thankfully, that chapter of the climate debate is coming to a close.

The success of the Paris Agreement will depend on how political power is shared between the four new camps in the 2020s—in other words, whether Alarmists can take on the best of Lukewarmist and Techno-Mitigator thinking, convert more undecideds, and defeat the Carbonists.

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© REUTERS/Yves Herman

European Council summits in Brussels can often be filled with rancor, never more so than when they involve money. This week’s EU summit in Brussels was a case in point.

EU national leaders held only a brief discussion about the multiannual financial framework (MFF), the EU’s seven-year budget due to start in 2021. Predictably, a new proposal to drastically cut the Commission’s proposed budget from Finland, which currently holds the rotating EU presidency, was welcomed by Northern countries and condemned by the South and East. But it was the proxy battles fought over climate and defense funding that were most interesting to watch.

Heading for Net-Zero

Western European members have spent six months trying to convince the Eastern members to support a target of completely decarbonizing the European Union by 2050. It finally looked like everyone would get on board at the summit after new EU Commission President Ursula von der Leyen offered a €100 billion “just transition” fund to ease the way for countries reliant on coal.

Indeed, at the last moment, after intense negotiations, Hungary dropped its opposition last night. Czechia fell in line too after other member-states agreed that the summit text could make reference to nuclear power. That left only Poland. It was thought that Prime Minister Mateusz Morawiecki would take negotiations late into the night, in order to get as much money as possible, and relent in the end. That’s because this was the last possible moment he could effectively wield his veto.

Von der Leyen has said she will propose binding legislation in March to set the 2050 target, whether or not there was unanimous political approval from all 28 (soon 27) EU member states. While the Commission prefers to get unanimous consent from the Council before proposing big items of legislation, it is not legally necessary. Once the legislative proposal is made, it only needs a qualified majority of member states to vote for it in order to become law. Poland can no longer veto.

“In Our Own Pace”

As he left the summit, Morawiecki said he had secured an “exemption” to the target. “The conclusions give us enormous flexibility,” he said, saying that Poland will not have to abide by the target but will still get “a very significant part” of the just transition fund. “We’ll reach it in our own pace,” he said. “We will be able to conduct the transformation in a way that’s safe and economically beneficial for Poland.”

However Poland will not be exempt from the 2050 legislation once it’s adopted. It will apply to all member states equally. This veto was largely symbolic, and all it has accomplished is angering the other EU member states and the commission, who are now not at all minded to be generous with Poland when it comes to the just transition fund.

Morawiecki’s grandstanding was certainly meant for domestic political consumption in Poland, where his Law and Justice party (PiS) likes to be seen as standing up against the EU and its supposedly burdensome climate legislation that would hold back Polish economic growth. But in fact he has probably just vetoed his way out of just transition funding.

French President Emmanuel Macron made the funding threat explicit in his closing press conference. He described Poland’s lack of participation as “temporary.” “If Poland was not to confirm its participation, it would step outside the European mechanisms also in terms of solidarity financial mechanisms,” he said, implicitly threatening to withhold not just the just transition funds, but also standard solidarity funds.

Defense Fight

Leaders were also meeting in the shadow of a contentious NATO summit last week in London, where US President Donald Trump lashed out at French President Emmanuel Macron for calling NATO “brain-dead.” Macron was also privately reprimanded by German Chancellor Angela Merkel for his comments.

Of course, Macron was merely using different words to make the same observation that Trump has made many times in the past—that NATO is “obsolete.” The dispute led to much discussion about the purpose and future role of NATO, and attention inevitably turned to the EU’s plans for a “defense union”—something that many fear is an attempt to replace NATO.

What that “defense union” is depends on who you ask. The French, who have always been NATO-skeptic, say it is needed because Europe needs the capacity to defend itself without American support. The Germans say it is merely a cost-saving exercise meant to stop duplication of efforts between EU countries and improve the efficiency of military procurement. And the British, Polish, and Americans believe it is a French plot to destroy NATO and build an “EU army.”

It has fallen to von Der Leyen to explain what exactly it is. Under her leadership, the commission is creating its very first Directorate-General (DG) for Defense, Industry, and Space, to be presided over by Margaritas Schinas, the vice president for promoting (originally “protecting”) the European way of life.

The Language of Power

“Europe must also learn the language of power,” von der Leyen said during a speech on European policy in Berlin last month. “On the one hand, this means building our own muscles where we’ve long been relying on others—for example in security policies.”

The Defense Union plan calls for a new EU military doctrine, a new EU fund for defense, a EU permanent military cooperation, a single EU headquarters for military operations, and a commission defense department.

The European Commission already deals with some defense and security matters, but they have never before been organized into one department. The new DG is expected to be complete next year. Its stated main purpose is to efficiently manage the €13 billion European Defense Fund. But many believe its powers will be steadily expanded over time.

Not everyone is so enthusiastic about this surge of military spending. In their budget proposal, the Finns have drastically cut the commission’s envisioned defense spending. Von der Leyen says this is unacceptable. “If one is serious about this then one has to invest,” she said last week.

It appears that the battles in both the climate and defense fights are going to move to the ongoing negotiations over the EU’s long-term budget. As is often the case in politics, money makes the world go round.

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Artwork © Claude Cadi

In the debate around Germany’s climate package announced in September, not much attention has been paid to industry. Yet the sector poses a conundrum for climate policies: despite major, long-standing financial incentives, German industry is barely reducing emissions. Its CO2 emissions fell 32 percent from 1990 to 2005, but they haven’t budged since, even though factory owners have long had to buy EU permits for every ton of carbon they emit, and Germany has some of the highest electricity costs in Europe, in part because of a surcharge to promote renewable energy. So what’s the issue?

Steel, Cement, and Chemicals

Clean Energy Wire (CLEW) recently organized a tour of European cement factories, steel mills, and chemical plants for journalists, among them the author, to learn more about the challenge facing European industry.

For context, industry is directly responsible for 21 percent of German emissions, and indirectly for another 11 percent because plants and factories use so much of the electricity and heat we attribute to “power generation.” The biggest climate sinners are steel and cement, though plastics and various chemicals also cause a lot of carbon emissions.

At a meeting in Frankfurt, the representatives of labor unions and industry associations were refreshingly honest about the reality of climate change, at times even repeating slogans you’d expect to hear from Fridays for Future like, “There are no jobs on a dead planet.” They emphasized the work they had already done to improve energy efficiency. For example, the chemical maker BASF is increasingly using waste heat to power production.

However, again and again, industry insiders stressed how hard the final yards of the energy transition would be. Further incremental improvements are possible, such as expanding best practices like using waste gases and recycled materials and making blast furnaces more efficient. Firms have increasingly been doing this over the past decade or so to keep emissions stable as the economy and production grows. But to complete the transition to a carbon-neutral economy, as Manfred Fischedick of the Wuppertal Institute explained, industry needs breakthrough technologies.

The Last Cuts Are the Deepest

The required breakthrough technologies are different for different materials. Take steel: the key step in steel production is removing the oxygen from iron ore. Generally, this is done by heating the iron ore with coking coal in a blast furnace. The high-carbon coking coal turns into carbon monoxide, which plucks oxygen off the iron, and massive amounts of carbon dioxide, which heats up the planet.

These carbon emissions are an unavoidable part of making steel from virgin iron ore. Unless, that is, you use a different process altogether. Salzgitter AG is among the firms planning to replace its blast furnaces with direct-reduction plants, which run not on coal but on either natural gas or hydrogen. Thanks to this new technology, steel mills will eventually emit harmless water vapor instead of CO2.

Cement makers face a similar challenge. A third of cement emissions are fuel-related, meaning they come from burning fossil fuels like coking coal to heat the kiln. The Heidelberg Cement plant in Lixhe, Belgium, is increasingly burning biomass instead—but that does nothing to reduce the remaining two-thirds, the “process emissions.” These are mostly the result of heating limestone into a material called clinker, the main component in cement. As the limestone heats up, it releases heat-trapping carbon dioxide into the atmosphere. A lot of it.

With no options for completely eliminating these “process emissions,” Heidelberg Cement wants to capture the carbon before it escapes. Enter the pilot project LEILAC. The engineers at the plant in Belgium have already redesigned the kiln so the various exhaust gases are kept separate. In the next stage of the project, they plan to capture the nearly pure carbon dioxide before it escapes, and then either use it in industrial processes or store it underground.

Carbon capture, hydrogen steel-making—the good news is that for two important sectors, we already know what the breakthrough technologies are likely to be. The bad news is that we don’t have the right policy framework to make them economically viable.

Emitting Is Cheaper

Let’s look behind the curtain of these carbon-eliminating processes. Heidelberg was only able to launch the LEILAC pilot project thanks to a €12 million grant from the EU Horizon 2020 fund, which in turn unlocked another €9 million in in-kind contributions from a consortium of international firms. But even if the companies were already capturing the carbon, it wouldn’t save them any money in the near term. While prices are falling, at the moment it costs a European cement maker over €150 to store a ton of CO2, compared with only €25 to buy an EU permit for emitting a ton into the atmosphere.

One might suggest raising the cost of carbon permits, as the EU is slowly doing. Heidelberg would, however, have to pass on those prices to construction firms, who would understandably rather import high-carbon cement from Egypt or Turkey than foot the bill. Low-carbon cement is no better than the traditional stuff, so unless Presidents Abdel Fattah el-Sisi and Recep Tayyip Erdogan suddenly decide to implement massive environmental taxes, the only way to keep EU cement-makers competitive under high carbon prices would be a carbon border tax, which imposes the costs of green production on domestic and foreign firms alike. The idea has backing in Brussels, but it is still “years away,” as the Financial Times has reported, and the EU would have to ensure it doesn’t violate WTO rules.

The one customer who could most easily decide to pay higher prices is the government, which is why industry associations are calling for “green procurement” rules that would oblige contracting authorities to support low-carbon industries. This, too, has costs for the taxpayer. Finally, Heidelberg needs an underground location to store all that carbon. A Norcem plant in Brevik, Norway, is leading the way here: thanks to public money, the plant could be doing full-scale carbon capture by 2024. The carbon will be injected deep beneath the seabed in depleted oil and gas fields. Oslo believes this CO2 storage and transport infrastructure has the potential to help its EU neighbors too, and it is seeking EU support to help finance it.

Less Carbon, but More Power

For their low-carbon production, steel companies would need boatloads of hydrogen. Most hydrogen used in Europe today comes from natural gas, which also leads to emissions unless the CO2 is stored somewhere. That’s why there is growing interest in “green hydrogen,” created by using renewable power to split water molecules.

The drawback here is the huge amount of electricity required. One industry representative claimed German steelmakers would need 100 terawatt hours of (renewable) electricity a year to produce in a low-carbon way. For reference, the German steel industry currently uses 22 terawatt hours per year, and the nation as whole uses about 500. The numbers are similarly scary for the chemical industry, which in a recent study reported it would need over 600 terawatt hours by the mid-2030s to go carbon neutral by 2050.

Of course, industry reps have an incentive to exaggerate what they need and to downplay solutions that leave them out, like building more with wood or reducing how many chemicals we use in the first place. But steel, chemicals, and plastic aren’t going away, certainly not by 2050. And independent studies back up what industry is saying: for instance, McKinsey argues global industry will need four to nine times as much renewable power for carbon-neutral production than it would consume in the absence of any climate efforts. The EU also worries about the energy intensity of hydrogen production in its long-term vision for climate neutrality.

Passing the Buck

The CLEW tour did offer up a few bright spots, like the trip to the Fraunhofer Institute in Braunschweig, where researchers are working on path-breaking solutions such as using flax fabric to replace some of the cement that goes into concrete. In fact, it could be seen as a positive that these nearly miraculous clean technologies—capturing carbon as it streams into the air, using wind power to split hydrogen molecules—exist and function at all, and that governments are at least supporting pilot projects like the one at Heidelberg. The EU Innovation Fund will provide €10 billion for low-carbon technologies during the 2020s, while the German hydrogen strategy will make available up to €300 million a year to support “real-world laboratories.”

But the main takeaway was that we still aren’t doing enough to help the leaders of the 2030s and 2040s to reduce the most stubborn emissions.

Angela Merkel is one of the many heads of government who advocate going climate neutral by 2050. At the UN, the German chancellor justified her government’s proposal for a relatively low carbon price for the building and transport sectors by explaining that “it’s the government’s task to bring everyone along”—i.e. that things can’t move too fast. Fair enough, but if we are hesitant to bring about major increases in gas prices in the 2020s, are we really doing enough to make sure the next generation of leaders can compensate with faster progress later? That they are able to capture, store, or avoid all the carbon we need to build new train tracks or electric cars? Does it make sense that Germany won’t take on new debt to fund climate action at home? That Germany, the Netherlands, and other wealthy member states are more focused on maintaining their EU budget rebates after Brexit than ensuring the EU can fund green transformation? That next budget cycle will run from 2021 to 2027, after which, for some industries, 2050 will be only one investment cycle away.

Even Europe’s climate-conscious leaders are taking their time picking the low-hanging fruit. And instead of building a proper ladder for their successors to reach the juicy stuff at the top, they offer small sums and promises that can only be broken once they are long gone.

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© REUTERS/Alister Doyle

In Germany, the introduction of carbon pricing is currently the subject of intense discussion. For a long time, the German government discussed establishing a carbon price to complement the EU emissions trading scheme. With the recent so-called Klimapaket, those discussions are becoming policy: the government now proposes charging €10/ton per CO2 in the transport and building sectors in 2021, rising to €35/ton in 2025.

Most commentators, however, emphasize that the German price is too low to set adequate incentives for decarbonisation. Other countries charge much more. In Sweden, the price is €114/ton of CO2. In Switzerland, it is €87/ton (though transport fuels are excluded). In France, meanwhile, the carbon price is €44/ton, and the Canadian province of British Columbia charges €27/ton.

In any case, price is not the only factor to consider. And while Germany is still preparing to introduce a carbon price, other countries and regions already use one as an effective instrument for climate change mitigation. Their experiences provide valuable lessons that can help governments both within and outside the EU to build and maintain support for carbon prices.

Four Keys to Success

As part of a research consortium, we recently published a study on carbon pricing experiences in Australia, Colombia, France, Sweden and Switzerland and the Canadian province of British Columbia. We were able to identify a number of elements that are potentially relevant when designing and implementing carbon pricing approaches. These are not “success factors” necessary and/or sufficient for carbon prices to succeed, but they do help ensure that a carbon price is more likely to achieve its objectives. There are four key elements.

First, a carbon tax should be designed to avoid excessive costs for heavily affected subpopulations (e.g. rural residents who drive long distances to get to work or populations with increased needs for heating, etc.). This is a salient feature in many jurisdictions, and one that serves to mitigate the impact of higher prices for gasoline and heating for heavily affected populations who may otherwise oppose the policy.

Second, it can be important for the carbon-pricing scheme to visibly return revenue to the general population, targeting specifically the general population and not only heavily affected groups. Returning (part of) the revenue directly to citizens, as Switzerland does through the health insurance system, is a component of many carbon prices and often heralded as a key driver of the political feasibility of a revenue-neutral carbon price.

Third, there may be broader support for carbon pricing if the revenue is used to actively promote low-carbon alternatives, i.e. if the money is reinvested to help people adopt low-carbon behavior and thus avoid paying the carbon price. Opinion polls frequently find strong public support for linking the use of revenue to the overall objectives of the policy, and in particular for directing it to support low-carbon alternatives.

And fourth, policymakers should ask whether low-carbon substitution options are available, independent of how carbon pricing revenue is used. For example, are there public transport options available for citizens who would prefer to take the train rather than pay more for gas? The availability of such options varies widely across jurisdictions and sectors.

A Rose is a Rose

In addition to these distinct policy features, governments must also consider how they communicate carbon pricing.

Some countries, such as Sweden, have implemented carbon prices as part of major tax reforms — this is sometimes brought forward as a potential success factor. In the Swedish case, the carbon price “hides” within broader changes. Linking it to tax reform allows policymakers to avoid increasing the cost of various products (e.g. by offsetting a carbon price introduction with a reduction of a general energy tax).

What’s more, embedding the carbon price in a wider climate policy effort can enable policy makers to more clearly communicate its relevance for climate protection. It is useful to frame the carbon price as related to achieving shared social values (climate protection) and/or supporting other popular initiatives/technologies (e.g. renewables, electric mobility).

It can also help to develop an active communication strategy about distributional issues: what can policymakers say to critics who argue that carbon prices are an excessive burden on low-income groups? The active communication on measures to address existing distributional concerns has sometimes been found to be important for political acceptability.

Last but not least, holding a systematic stakeholder engagement process can increase public acceptability, both by increasing legitimacy and by addressing critical concerns in the policy design phase. In this context, it is sometimes relevant if the tax is described as a tax or something else, e.g. an “instrument” or “fee”. This might be relevant for the public perception of the tax given that taxes can be perceived quite negatively in some contexts. In Australia, for example, the Liberal party criticized what they called “a tax on everything” and was eventually able to repeal the carbon pricing scheme.

Again, considering these elements does not ensure a successful implementation of a carbon pricing scheme but may offer promising guidance for this important feature of an effective climate policy. To what extent did the jurisdictions in question follow best practices?

A “Perfect Storm” in France

Our study revealed some interesting patterns. Carbon pricing in France hit the headlines when an increase in fuel costs helped spark the “gilets jaunes” protest movement. But the French carbon scheme is quite different in terms of design and communication from those in many other jurisdictions: a lack of clearly visible revenue recycling, the difficulty of avoiding the tax in the transport sector), inadequate compensation measures, as well as simultaneous wealth tax cuts and a surge in global oil prices caused  France to experience more protests and greater backlash than more successful carbon pricing jurisdictions. President Macron eventually suspended the planned carbon tax increase for all of 2019. Given the multitude of design and communication problems, the French case serves as a “perfect storm” example of an unsuccessful case, where it is difficult to relate the lack of success to a single factor.

Although the carbon price there was eventually repealed, Australia’s carbon pricing design and communication was actually more similar to some of the successful jurisdictions, showing that even a well-designed carbon pricing instrument can be derailed in the context of a highly fossil-fuel driven economy and an unfavorable political climate.

All successful carbon tax jurisdictions considered pay at least some attention to avoiding excessive costs for socially vulnerable populations. We found that all successful carbon tax jurisdictions with significant tax rates return revenues to the general population in some, often very visibly ways (e.g. in the case of British Columbia and Switzerland). Successful carbon taxes have been implemented both in the context of wider tax reforms and also independently.

While language around “taxation” has sometimes been avoided, this is not always the case. Many successful carbon taxes are referred to as such, e.g. the Swedish but also the British Columbian one. Whether or not “taxation” is a loaded term that needs avoiding is dependent on the specific context and political discourse.

In Germany, so far, more concrete and systematic plans to visibly return revenue to the population are still missing. Instead, the carbon price is part of a bigger package, which includes some measures like increasing the Pendlerpauschale (commuter allowance) to ease the potential burden on commuters. The next few years will show whether the German scheme is fit for purpose—whether it can both reduce emissions with a comparatively low carbon price level and maintain public support for the climate transformation.

N.B. This article is based on a study by experts from adelphi, Climate Focus, and Perspectives Climate Group, commissioned by the German Federal Ministry for the Environment, Nature Conservation, and Nuclear Security (BMU). 

The post How to Make Carbon Pricing Work appeared first on Berlin Policy Journal - Blog.

© REUTERS/Christian Mang

Gretchen, from Berlin, wanted “a clear CO2 price.” Her school-age daughter held tight to her poster, too shy to answer. Tim, from Florida, stood nearby in a Bernie Sanders t-shirt with a sign about the Green New Deal and said he was simply “here to support the climate strike.” On the other side of the Brandenburg Gate, Simon was handing out Fridays for Future flyers but admitted he “wasn’t expecting much.” An older woman nearby hoped that the German government would offer more than “superficial solutions.”

This was at 12:30 p.m. at the Brandenburg Gate, the center of the climate protests that drew about 100,000 people in Berlin and even more across Germany. If everything went to plan, Chancellor Angela Merkel would have been announcing Germany’s new “climate protection package” at the same time—but the leaders of her Christian Democrats (CDU/CSU) and the Social Democrats (SPD) had been up until the early morning hammering out the details.

Merkel, flanked by all of the grand coalition heavyweights, finally took the podium at Berlin’s Futurium two hours later. She acknowledged the scale of the climate crisis and said she was impressed with Greta Thunberg’s call to “unite behind the science.” SPD Finance Minister Olaf Scholz didn’t mince words either: “With the climate protection packet, we are taking this seriously… Fridays for Future has shaken us awake.”

Not Doing Its Bid

But are the announced measures enough to satisfy Gretchen and Simon, to keep Germany on track to do its part to uphold the Paris Agreement? It doesn’t look like it.

The key element of the package is a pricing system for emissions from the transport and building sectors. Through an emissions trading system, Germans will have to pay for each ton of carbon dioxide they emit. For example, heating companies and petrol stations will have to buy permits for the emissions they cause by selling heating oil and gasoline, thus raising prices for consumers and encouraging more sustainable behavior.

However, a ton of CO2 will cost only €10 in 2021 before increasing to €35 in 2025. That translates into an extra 3 cent tax on every liter of gasoline in 2021, but because the tax subsidies for long-distance commuters will also be increased by 5 cents per kilometer, gasoline will in some cases be cheaper in 2021 than it is today. Although governments always have to consider the social impact of climate policy, it is certainly a curious decision to subsidize driving to work rather than just returning money to low income groups—whether people bike, drive, or walk.

As a bevy of critics have already pointed out, the price on CO2 is dramatically lower than what scientists, behind whom Merkel wants to “unite,” are calling for. The German Environment Agency, which provides the government with scientific advice, has advocated a carbon price of €180 per ton. Two of Germany’s most esteemed climate think tanks, the Mercator Research Institute and the Potsdam Institute for Climate Change Research, urge a price of €35-70 in 2020 and €70-180 by 2030.

For reference, Sweden taxes carbon at about €110/ton; Switzerland is discussing a carbon price floor of over €100/ton. In the US, Exxon, Shell, and BP are lobbying for a $40/ton tax.

Merkel admitted the carbon price system was “a compromise, no doubt about it.” Compromise is the art of politics; chancellors don’t just read scientific papers and force them through as policy. The thing is, these numbers aren’t even in the same ballpark. Those the chancellor dismissed as “impatient young people” won’t think much of the measure.

Climate activists will also be disappointed with the move to reduce the so-called renewable reallocation charge or EEG-Umlage, which raises the price paid to producers of renewable energy. In this instance, the government has a stronger argument. With the price of carbon in the EU emissions trading system increasing—unlike the complementary German system announced today, the European version covers industry and electricity generation—European producers of high-carbon products like steel, cement, or chemicals are at a significant competitive disadvantage vis-á-vis foreign manufacturers. Until the European Union starts taxing carbon at the border, the price of electricity can only go so high before industry must move abroad or shut down. European Commission President-elect Ursula von der Leyen has already expressed her support for a carbon border adjustment tax.

Incentives, Regulations, Bans

The other measures are a mix of price incentives and outright regulation or bans. For example, the government will reduce the value-added tax on train tickets from 19 to seven percent. At the same time, the tax on domestic flights will be increased. It will also be forbidden to build new oil heating units after 2025, and the government will help pay for customers to switch to climate-friendly alternatives.

Merkel had the courage to admit that her government’s previous climate policy has failed: Germany will miss the climate targets for 2020 that a previous Merkel government set in 2007. To avoid this happening again, the “climate cabinet” will continue to meet in the future and there will be yearly monitoring of the country’s progress.

Carbon pricing, tax incentives, bans on especially unsustainable behavior—these are all sensible measures. And with so many world leaders still denying climate science, it’s hard to be too critical of a center-right government that acknowledges the problem and spends its political capital raising taxes, for example on flights and petrol.

Standing by the Schwarze Null

Yet one is left feeling that the deeds do not match the words about the threat facing future generations. Finance Minister Scholz said the package would cost €54 billion by 2023. No small sum, though Merkel reiterated that the government “stands by the schwarze Null”, Germany’s policy of avoiding budget deficits.

At a time when investors are paying the German government for the privilege of lending it money, and the country appears to be headed for a recession, it is astonishing that Merkel’s government is unwilling to consider borrowing money to address what the chancellor calls a “challenge to humanity.” While no one expected the coalition to announce it was immediately giving up the cherished schwarze Null, there might have been a hint that it is time to change direction, to change Merkel’s legacy and put successors in a better place to cut emissions once the low-hanging fruit is all gone.

Instead, after 12 years of failing to hit climate targets, the government spent months working on a CO2 price that the directors of Environmental Action Germany and Greenpeace call, respectively, “laughable” and “miles behind the Paris Agreement obligations.”

Merkel will, then, go down in history as the climate chancellor. In every book written before 2010.

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© US Army/Sgt. Ryan Jenkins/Handout via REUTERS

In its most recent assessment of climate change impacts, the Intergovernmental Panel on Climate Change (IPCC) devoted a total 1,131 pages to warming’s effects on various ecosystems and human habitats, such as coastal systems, freshwater resources, and urban areas. But only 38 pages were specifically devoted to “human security,” and, within that section, only five pages were devoted to armed conflict and four to human migrations—arguably the most meaningful consequence of climate change for humans. The impression given is that human and international security are secondary when compared to ecological and resource concerns. In the documents on climate change issued by the US Department of Defense, however, the ranking of priorities is exactly reversed: the societal and security consequences of warming rank highest, while ecological considerations receive far less attention.

Both the Department of Defense and the IPCC view climate change as a significant peril, encompassing a wide range of phenomena—rising seas, more frequent and intense storms, prolonged droughts and heatwaves, recurring wildfires—considered threatening to natural and man-made habitats. Yet the Pentagon highlights the perils to human societies. “Climate change,” it told Congress in 2015, is “contributing to increased natural disasters, refugee flows, and conflicts over basic resources such as food and water.” And while the earliest victims of these pressures are likely to be “fragile and conflict-affected states” in the developing world, ultimately “even resilient, well-developed countries are subject to the effects of climate change in significant and consequential ways.”

The impression one obtains in Washington today, however, is that all federal agencies, including the Pentagon, are expected to refrain from discussing climate change. Soon after assuming office in 2017, President Donald Trump rescinded Executive Order 13653, “Preparing the United States for the Impacts of Climate Change,” a measure signed by President Barack Obama in November 2013. That directive had enjoined every government agency to identify its vulnerabilities to global warming and to undertake whatever steps were deemed necessary to overcome any perils so identified; it also called on all federal agencies to help reduce the severity of global warming by reducing their own carbon emissions. In accordance with Obama’s order, the Department of Defense had undertaken substantial efforts to reduce its exposure to warming’s effects and reduce its emissions. All this, however, was supposed to come to a halt after Trump rescinded the Obama measure and commenced a campaign to expunge “climate change” from the formal government lexicon. Nonetheless, the Pentagon has largely persisted with its drive to prepare for climate change, even if it has generally refrained from employing that term in public.

A “Threat Multiplier”

Most senior officers have come to view climate change as gathering momentum and posing a significant threat to American national security. Many of them have served extended tours of duty in Asia, Africa, and the Middle East and so have witnessed first-hand the harsh impacts of warming on vulnerable populations in resource-deprived areas. They have also been called upon—in some cases repeatedly—to provide humanitarian assistance to storm-ravaged areas both at home and abroad. And they know that their own bases, in the United States and elsewhere, are highly vulnerable to severe flooding, rising sea levels, recurring wildfires, and other consequences of climate change.

When not directly engaged in combat, American military officers, like those elsewhere, devote much of their time preparing for the next war or wars. This means, of course, extensive training and weapons procurement, along with systematic examination of the arms and tactics of likely adversaries. But it also entails assessing the terrain and environmental conditions in the areas where American forces may be obliged to fight. This has meant intensive study of potential battlefields in Asia, Africa, and the Middle East—and increasingly in the Arctic region. This, in turn, has led to research on changing climatic conditions in those areas and how these changes are affecting the stability and political composition of local societies.

This process began in 2006, when the CNA Corporation, a Pentagon-funded think tank once known as the Center for Naval Analyses, convened an advisory board of retired officers and tasked it with assessing the impact of climate change on American national security. A year later, the group released a summary of its findings, National Security and the Threat of Climate Change, which was widely circulated in Pentagon circles and had a huge impact on US military thinking. For the first time, climate change was identified as a significant threat to American national security.

One of the reasons it proved so influential was its new concept of “threat multiplier.” Even when not a direct cause of conflict and chaos, climate change could prove the one decisive factor that pushes fragile societies to the brink of internal conflict and state collapse. This notion has remained the cornerstone of US military thinking on climate change ever since. More than anything, it identifies societal cohesion and government competence as key factors in determining the cumulative impact of climate change on exposed populations: the more fragmented and corruption-ridden a polity, the greater the likelihood it will succumb to warming’s harsh consequences, producing internecine warfare, humanitarian disaster, and mass migrations. The resulting chaos will, in turn, result in multiple challenges for the US military, whether in the form of frequent humanitarian aid missions or military interventions or both.

Climate Change and the Syrian War

By 2010, this concept had acquired widespread acceptance within the senior military leadership and was incorporated into that year’s Quadrennial Defense Review Report (QDR). “Assessments by the intelligence community indicate that climate change could have significant geopolitical impacts around the world, contributing to poverty, environmental degradation, and the further weakening of fragile governments,” it stated.

The QDR identified geopolitical impacts, mass migrations, and state collapse as among the principal outcomes of climate change—topics that receive relatively scant attention in the various IPCC reports. Admittedly, the Pentagon views the climate problem through the lens of national security and so will tend to emphasize factors that bear on those concerns. At the same time, US military officers are vitally concerned about the real-world consequences of climate change, especially those that are likely to result in large-scale human death, displacement, and suffering.

By the middle of the decade, as the war in Syria gained momentum and spurred massive waves of migration to Europe, many in the US military and intelligence community saw climate change as a major precipitating factor. A prolonged drought in 2007-2010 decimated Syrian agriculture and drove many thousands of impoverished farmers into crowded cities, where they received scant assistance from the Assad regime—and, it is thought, helped fuel the anti-government protests that erupted in 2011.

More recently, officials at the US Africa Command (Africom), have identified persistent drought in the Sahel region of North Africa as a source of intensified tribal and terrorist violence there. “Changing weather patterns, rising temperatures, and dramatic shifts in rainfall contribute to drought, famine, migration, and resource competition [in the Sahel],” General Thomas D. Waldhauser, Africom’s commander, told the Senate Armed Services Committee in February 2019.

US Bases at Risk

American officers see that there is a limit to how many humanitarian and stability operations they can undertake at any one time, while also preparing for high-intensity conflict with “great-power competitors,” such as China and Russia. Climate change is seen as a significant impediment to military preparedness by diverting the services from their primary tasks. What’s worse, warming’s effects are expected to intensify in the years ahead, pushing more and more states to the point of collapse. And, just as worrisome, climate change threatens to endanger the future viability of many of the Department of Defense’s key stateside bases, diminishing its capacity to undertake major operations abroad.

In response, the Pentagon has adopted a proactive stance, seeking both to minimize the future impacts of climate change on its combat preparedness and to reduce its own contributions to climate change. To assess the vulnerability of its bases, the department initiated an audit of the climate vulnerability of its major coastal bases. It revealed that many of those bases were at risk of inundation from sea-level rise, storm surge, and severe flooding. Subsequent reports, covering all US bases and all climate-related perils (including wildfires, high winds, and prolonged drought), have generated considerable controversy as the Trump administration has sought to delete references to “climate change” and members of Congress have demanded access to unexpurgated versions of the documents (which have since been made public).

Despite the administration’s efforts to stifle discussion of climate change, senior military officials continue to worry about the vulnerability of their major bases to extreme climate effects. Recent events have amplified these concerns. In September 2018, Hurricane Florence inflicted over $3 billion in damage to one base alone—Marine Corps Base Camp Lejeune in North Carolina—and additional damage to other bases in North and South Carolina. A month later, Hurricane Michael ripped through the Florida Panhandle, destroying much of Tyndall Air Force Base and incapacitating seventeen F-22 Raptor stealth fighter planes, worth $334 million each. And in March 2019, severe inland flooding devastated Offutt Air Force Base—headquarters of the Strategic Air Command.

Work with Allies and Partners

Meanwhile, in a bid to improve its energy efficiency and reduce carbon emissions, in 2011, the Pentagon released the first of a series called Strategic Sustainability Performance Plans, mandating significant improvements in energy efficiency, renewables use, and emissions reduction. It decreed that 20 percent of all energy consumed at Department of Defense bases and installations had to come from renewable sources by 2020. Data released in 2016 showed that the services were making significant headway toward achieving these goals, but it has been difficult to track their progress since then.

The department has also expressed its commitment to promoting climate adaptation by the military forces of allied and friendly nations. From early on, the Pentagon leadership concluded that it would not be possible to prevent the widespread disintegration of fragile societies abroad unless those states were better prepared to cope with the shocks and pressures of climate change. Accordingly, the Department of Defense enjoined its overseas commands, such as Africom, to collaborate with the forces of local nations in developing emergency response networks and improved food, water, and health systems.

By 2015, such engagement efforts were well under way. According to the Pentagon’s report to Congress that year, Africom was working closely with partner nations “to enhance planning, responses, and resilience to the effects of climate change.” Among other activities, Africom was helping to conduct continent-wide training workshops on pandemic and natural disaster preparedness, usually in conjunction with local armed forces and civilian health agencies. The Pacific Command (Pacom), for its part, was working with local partners on enhanced disaster response capabilities and on efforts to promote “sustainable resource management and critical resource security.”

The 2014 edition of the QDR stated that climate change, “creates both a need and an opportunity for nations to work together, which the Department will seize through a range of initiatives.” This is a rather remarkable statement for an organization not known for its political outspokenness, and testifies to the extent of its concern over the globally destabilizing consequences of climate change.

For now, with Donald Trump in the White House, it is unlikely that senior military officials will speak so openly about their concerns over the national security implications of climate change. Nevertheless, it is evident that they have undertaken numerous initiatives—many still under way—to address its severe effects. In so doing, they have also developed a unique analysis of climate change and how it should be addressed. This approach, which places the vulnerability of human societies and institutions foremost and makes their protection the highest climate-related priority, deserves close attention by the rest of humanity, both at home and abroad.

The post No Climate Denial at the Pentagon appeared first on Berlin Policy Journal - Blog.

Artwork © Claude Cadi

As barbecue season comes to an end, Berlin is debating raising taxes on meat. The president of the German Animal Welfare Federation, Thomas Schroeder, kicked things off with a call to apply an “extra tax” on meat and use the revenue to improve conditions for livestock.

Politicians of all parties quickly took up the idea. Albert Stegemann, the agriculture spokesperson for Angela Merkel’s Christian Democrats CDU/CSU Bundestag caucus, told Die Welt it was a “constructive proposal,” though the revenues had to be used to help farmers switch to sustainable practices. His counterpart in the center-left Social Democrats (SPD), Rainer Spiering, preferred ending the value-added tax (VAT) reduction for meat rather than creating a new tax. Most products in Germany are taxed at 19 percent, but many “basic supply” foods such as fresh fruits and vegetables, coffee, sugar, (cow but not plant) milk, and meat enjoy a reduced rate of 7 percent.

Robert Habeck, the co-leader of the surging Green party, was skeptical of the usefulness of isolated tax hikes for certain products. Instead, he argued in the Süddeutsche Zeitung, the entire VAT system needed to be rebuilt around “ecological nudging, coherence, and social effects.” Meanwhile, Martin Hofstetter, an agriculture expert at Greenpeace, said he preferred a tax at the slaughterhouse, whereby farmers would pay a tax per kilogram of meat. The proceeds would then go to “those farmers who want to reconstruct their farms in a way beneficial for the species and the environment.”

It is quite remarkable that the political middle—and the 56 percent of respondents to a Civey poll who support a VAT increase—agrees with the concept and is largely debating how to make meat more expensive. Just two years ago, SPD and CDU/CSU politicians flatly rejected a meat VAT hike proposed by the German Environment Agency. In 2013, the Greens triggered a veritable “shitstorm,” as the Germans are so fond of saying, by suggesting that public cafeterias should try serving only vegetarian dishes one day a week. The CDU general secretary at the time called it another “building block in the green Federal-Prohibition-Republic.”

A Chicken and Egg Problem

The theory behind a meat tax is quite simple: increasing the price of something reduces demand, and meat is particularly damaging to the environment. Emissions from livestock represent 14.5 percent of global greenhouse gas emissions, according to the UN Food and Agriculture Organization. Cattle, by far the most greenhouse gas-intensive source of calories, is responsible for most of this, so simply switching from beef tenderloin to chicken salad can make a big difference. In Germany, agriculture emissions have fallen much less than emissions from industry or energy production in the last 30 years.

The tax would bring in enough money to make a difference. Journalist Christiane Grefe writes in Die Zeit that a VAT increase would bring in €4-5 billion a year, nearly as much as the Ministry for Food and Agriculture says is required to finance “comprehensive change” in the livestock sector.

However, to some extent proponents of meat taxes are pursuing different goals. A 2018 study by researchers at Oxford advocated taxing red meat on the grounds that humans are eating an unhealthy amount of it and burdening healthcare systems. Governments tend to be more willing to regulate citizens’ diets for health than climate reasons—think of taxes on sugary drinks—although rules about food are generally harder to stomach than subsidies for solar panels. Sweden and Denmark have discussed meat taxes in parliament, but even those climate trailblazers haven’t passed one; in Denmark the Greens’ proposal for a tax on beef, veal, and lamb went nowhere because other key parties said it was socially unfair.

Innovate Farming

While animal welfare advocates and climate campaigners both win if Germans eat less meat, there are ways to reduce emissions from agriculture without necessarily farming fewer animals. Feeding cows seaweed appears to significantly reduce the amount of methane the ruminants belch into the atmosphere. In “silvopasture” farming, the animals graze on tree-covered land that sequesters five to 10 times as much carbon as a typical pasture.

Silvopasture is just one of the agricultural techniques for turning farmland from a carbon sinner into a carbon sink—and these are vital innovations because of how culturally important meat is all over the world. The type of people who in July threatened a Leipzig kindergarten that stopped serving pork are as unwilling to compromise for the climate as they are to make concessions to Muslim food customs. And it remains to be seen if patriotic middle-class Chinese would be as happy to lead the world in pork restrictions as they are to dominate electric car production.

New farming techniques or not, there is no getting around the fact that humans, especially rich Westerners, have to eat less meat in order to prevent climate crisis. As a 2018 Nature study put it, “Greenhouse gas emissions cannot be sufficiently mitigated without dietary changes towards more plant-based diets.” The IPCC’s landmark new report on land use emphasizes how much it matters what we put on our plates: every acre we use to grow soybeans for cows is an acre we cannot use to reforest the planet.

Legitimate Concerns

The parties skeptical of a VAT tax increase—the simplest measure to implement—also raised policy points in their statements to Die Welt. Gero Hocker, agriculture spokesperson for the business-friendly Free Democrats, worried that higher taxes would simply push consumers towards cheaper imported meats. VAT applies to imports, but meat produced cheaply in, say, Poland would face lower taxes in absolute terms.

The EU recently signed a trade deal with cattle powerhouse Brazil, where the Bolsonaro administration is looking the other way as the Amazon is deforested to be used as farmland. Both parties made a general commitment to “effectively implement the Paris Agreement,” but it’s the enforcement that counts. As a study by the organization Transport and Environment points out, violations of environmental protections are not subject to the same state-to-state dispute mechanism as are violations of commercial clauses. In an interview with Le Monde, Nicholas Hulot, who recently resigned as French environment minister, slammed the Brazil trade deal as “completely antithetical to our climate ambitions.”

Trading Pearls for Swine

One bright spot on the trade front is European Commission President-elect Ursula von der Leyen’s intention to “introduce a carbon border tax to avoid carbon leakage.”

Sam Lowe of the Centre for European Reform points out that such a tax, which is based on the carbon content of a given good, is a bit like a VAT in that it is equally applicable to domestic and foreign products. Crucially, he adds, “it is still levied on imports whether there is a trade agreement in place or not.” So a carbon border tax is an excellent way to maintain free trade in the era of climate crisis, as well as use the EU’s economic weight to put pressure on its trade partners and make “climate leadership” more than a buzzword.

Exports are similarly tricky. Germany exports about half of the meat it produces, so the industry might decide to concentrate its efforts on exports to compensate for consumers who are deterred by the VAT.

FDP politician Hocker might well have made the same point about disadvantaging expensive organic meat, which would be taxed higher in absolute terms. Would the middle-class German gourmand decide to give up organics and go back to bargain meat from cows squashed in stalls and stuffed full of antibiotics? And the working-class shopper switch to processed meat, the unhealthiest of all? Some disgruntled consumers would certainly prefer to pay a few cents more per packet of ground beef than be forced into trying tofu.

This is why it is so important for Germany and the EU to pair any new taxes with programs to encourage more sustainable meat (and plant-based alternatives). Greenpeace reports that the EU pays about €30 billion a year to livestock or animal fodder farms, giving Brussels the power to change behavior with new criteria for receiving subsidies.   

The Hard Work Begins

Even the agriculture spokesperson for the climate-denying Alternative für Deutschland (AfD) called for a mandatory labelling system instead of a tax. Polls show there is a lot of potential to get those who can afford it to voluntarily pay more for more sustainable, humane meat.

Agriculture Minister Julia Klöckner, a member of the CDU, is not known for her willingness to take on big business, to put it kindly, but from 2020 she is introducing a mandatory, unified labeling system for pork to replace the flawed, voluntarily system supermarkets are currently using.

Political leaders have been talking about an energy transition for decades. But as the climate crisis starts to bite, policymakers are starting to tell voters the hard truth: switching to renewable energy and driving Priuses won’t be enough to avert climate crisis. Our burgers will have to taste different, too. As such, the new battleground in the fight to save the planet is the kitchen.  

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