Hauke Benner – Creating the first climate protection law in Germany: Market failure, state failure – or a systemic crisis?

During the leadership contest of Germany`s largest political party, the rightist Christian Democrats, climate change was not a topic. The debate in Germany concerning strikeing school students is not about climate change, but if kids should be missing classes. As for the Climate Chancellor Angela Merkel and Germany as a leader in environmental issues, that has gone the way of clean German diesel cars.

Hauke Benner is a former journalist and currently a political activist against climate change.

Translated and edited by BRAVE NEW EUROPE

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German lignite surface mining – Jaenschwalde Picture David Shirreff

Nicolas Stern, former chief economist at the World Bank, listed in his Review for the UK Treasury of 13 years ago in detail the costs of climate change and urged “decision-makers” to act quickly and take decisive action as soon as possible. “The longer we wait, the more expensive it gets”, was his sobering assessment of the world climate conferences and their ambivalent declarations of intent. Stern also spoke out in favour of state interventionist measures, because “climate change is the biggest case of market failure the world has ever seen” (Stern Report, 2006).

At the United Nations Climate Change Conference in Katowice (COP 24) in December 2018 it was announced that the global warming climate target of 1.5 degrees set by the Paris Agreement is achievable. The German delegation led by Environment Minister Svenja Schulze joined a “High Ambition Coalition”, an alliance of a number of developing and industrialised nations pushing for a “strong agreement”. In the Katowice resolutions, the states committed themselves to the following: To report to the UN every two years from 2020 on, what measures they are taking to reduce their greenhouse gas emissions. In addition, from 2023 there is to be an assessment every five years whether the measures introduced by the states can effectively limit global warming; if not the agreements must then be strengthened.

Two weeks ago, German Environment Minister Schulze presented a draft of the first German climate protection law against the background of the international agreements reached in Katowice and Paris: The law is intended to stipulate that Germany will reduce its greenhouse gas emissions by 95 percent by 2050 compared with 1990 levels. It also sets interim goals: Compared with 1990, greenhouse gas emissions are expected to have been reduced by 40 percent in 2020 (in fact, Germany will only reach 32 percent), by 55 percent in 2030 and by 70 percent in 2040.

The legal draft outlines a path with intermediate steps for each sector, such as energy, transport, agriculture, building insulation, so that the sector goals can be accurately controlled. The draft law sets emission levels for each individual year of the coming decade.

Each ministry is to be responsible for climate protection in line with its portfolio: the Ministry of Transport must develop targets for climate-friendly transport, the Ministry of Agriculture for climate-friendly agriculture and so on. If the ministries miss their targets, they will have to buy CO2 certificates from the EU from their budgets to compensate the shortfall.

The bill immediately met with decisive opposition from the Christian Democrats (CDU) and Liberals (FDP). As one leading CDU politician claimed: “This is de-democratisation, a path to a soviet republic and a green economic plan”. Economics Minister Altmaier (also CDU) roundly rejected the dirigiste draft of the Environment Minister. In his opinion each ministry should create its own climate guidelines.

So far, Svenja Schulze has only been supported by her own SPD faction and the Greens as well as parts of the Left Party. Why are Christian Democrats and Liberals opposing this plan? Is it perhaps because Schulze is finally making a clear statement: if we want to meet the agreed climate targets of Paris, we cannot rely solely on the forces of the market and prices?

Contrary to the claim of the temple guards of neoliberalism, regulated markets already exist in Germany: Individual segments such as the energy, agriculture, and transport have been managed in Germany for decades by means of government subsidies running into billions. Without the billions in research funds, a nuclear power plant would never have been created, without the exemption from the CO2 tax, no coal-fired power plant would be competitive any more, without the tax exemption for airline tickets and fuel, air travel would be significantly more expensive – or without the billions in EU agricultural subsidies for large-scale farmers, industrial agriculture would come to a standstill.

Until now, the agreed climate protection agreements from Rio 1992 to Paris 2015 were always just declarations of intent. The coalition agreement of 2018 between CDU and SPD provides for the adoption of a climate law in 2019. But the details remained open, even an increase in the CO2 price was rejected by the economic liberals in association with the reactionary trade union IG Bergbau, Chemie, Energie: it could cost growth and jobs.

In recent years, the German government has repeatedly blocked concrete measures towards achieving its zero-emission target when it conflicted with corporate profits. The Christian and Social Democrats have claimed the accepted climate goals cannot be achieved by 2050 because Germany´s “economic viability and resilience” as an industrial economy would be threatened.

(If greenhouse gas emissions are to be reduced by 30% by 2030 and zero emissions are to be achieved by 2050 – then a drastic turning point in the current business as usual growth policy is overdue. To achieve this, a far-reaching social transformation is necessary. In the area of energy policy, the proposed phase-out of coal-fired power generation by 2038 is a rotten compromise. Lignite power generation alone accounts for one fifth of Germany’s CO2 emissions. According to various research institutes, an exit by 2030 at the latest is no problem from a technical and energy policy point of view. The only thing that is necessary for this is to strip large power generation groups such as RWE, Eon and the closely associated trade union of their illicit political influence. There is however no political will in the Bundestag to do this. Political pressure must therefore continue to come from outside the parliament, for example from “Ende Gelände” (Ende Gelände is a large civil disobedience protest movement in Germany to limit global warming through fossil fuel phase-out) or the student movement “Fight for Future”.

The example of Germany’s transport policy best illustrates why the Paris climate targets and Ms. Schulze’s climate law can only be achieved by means of industrial policy restructuring:

Until now, car and lorry traffic has been responsible for about one fifth of German CO2 emissions. According to Mrs. Schulze, if CO2 emissions are to be reduced from 160 million tons to 98 million tons by 2030, this cannot only be achieved by means of electro mobility, restrictions on individual urban traffic, or increased engine efficiency in lorries. The share of the lorry sector within the CO2 emissions of total traffic volume will even increase. According to the Ministry of Transport emissions in the transport sector will only decrease to 144 million tonnes by 2028. The example illustrates why the German Transport Minister, who sees his post being head-lobbyist and speaker for the automotive industry, does not want the Environment Minister to set him limits. Then he would have to significantly increase the pressure on the car industry and transport companies.

What is needed is a significant reduction in car traffic and a reversal of the huge increase in transport volumes as a result of globalisation. The flow of goods within Europe, which has grown so much because, among other things, wages in Eastern Europe are significantly lower and the ecological costs of transport are not included in the pricing of goods, must be drastically reduced. More must be produced locally again and the international division of labour and the value chain, especially within the corporations, must be reduced. This goes against the profit interests of the VW Group, which produces throughout Europe, and against the highly concentrated German food industry, which has its primary products procured from all over the world.

It may be that in a “green capitalism” the world division of labour will be gradually reduced. But what is needed now is not small steps that do not hurt the corporations and consumers, but big ones with all their economic consequences. Is that clear to Ms Schulze? I’m sceptical, because if the SPD, which is still closely linked to reactionary German trade union leaders, wants to support this, it must enter into a political confrontation with its clientele. And German trade unions don’t oppose the large capitalist corporations, but sit at the same table as “social partners”.

At the latest with the creation of effective policies against climate change we shall come to the logical end of the (neo-) liberal market ideology – it is not only a market failure, as Nicolas Stern thinks, but also an “unprecedented failure of the state”, according to Ottmar Edenhofer, the new head of the Potsdam Institute for Climate Impact Research, in his gloomy assessment of international climate policy.

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