By Walter Russell Mead
Germany is planning to cut many of its flagship green programs. Funding for these policies relies heavily on the sale of carbon emissions certificates under Europe’s cap-and-trade system, but the price of carbon in that system has flatlined. Der Spiegel reports:
The budget for 2014 includes €2 billion for the Energy and Climate Fund to be generated via the sale and trade of CO2 emissions certificates. But the calculation originally assumed a price of €17 euro per ton. Real emissions prices, however, have been well below that for months and are currently trading below €4 per ton. A paper presented to Merkel’s cabinet last week by the Finance Ministry predicted a €1.1 billion shortfall. [...]
By the end of the month, Environment Minister Peter Altmaier, a member of Chancellor Angela Merkel’s conservative Christian Democrats, is set to cut the program aimed at promoting electric cars, a fund for research and development of energy storage technologies and a third program focused on protecting and expanding forestland in Germany as a way to absorb more CO2 out of the atmosphere.
And these are only a sample of the programs facing cuts: A leaked document suggests that 11 more green programs and measures are on the chopping block.
Germany’s green failures haven’t just collapsed under their own weight; they’ve also helped drag the country into an energy problem. The decisions to kick nuclear power after Fukushima and to reject shale gas have put a strain on the country’s energy mix. Renewables like solar and wind will need to pick up some of that slack—as will dirty-burning coal. But solar and wind only produce energy when the sun is out and the wind is blowing. Berlin desperately needs to figure out how to efficiently store that energy for windless nights. An energy storage R&D fund was expected to help solve that problem; now that the funding has dried up, it’s back to square one.
In Europe, one green policy failure begets another.