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How Not To Do It
Lessons Learned from Germany’s Great Green Catastrophe

Germany’s Energiewende, its turn towards renewable energy, has been a failure of the highest order. Bjorn Lomborg is simultaneously one of the most insightful environmental thinkers around and a modern green pariah, and he captures the German debacle in all of its ignominy in a recent opinion piece for the FT:

Last month, the government said that 6.9m households live in energy poverty, defined as spending more than 10 per cent of their income on energy. This is largely a result of the surcharge for renewable energy. Between 2000 and 2013, electricity prices for households have increased 80 per cent in real terms, according to data from the OECD and the International Energy Agency.

This means more and more money is going from the poor to the rich. Low-income tenants in the Ruhr area or Berlin are paying high energy prices to subsidise wealthy homeowners in Bavaria who put solar panels on their roofs.

This is a point we’ve hit on before: high electricity prices are a kind of a regressive tax, felt much more keenly by the poor than the rich. But these are only the economic costs of this green surge; the environmental costs are even more damning. To make up for the country’s nuclear drawdown (it should be pointed out that nuclear is essentially a zero-carbon energy source), Germany has had to burn coal in record quantities, resulting in ever-rising emissions.

Worst of all, the feed-in tariffs that Berlin enacted to increase wind and solar’s market share have only served to prop up technologies incapable of competing on their own merit, rather than developing more effective and efficient solar panels and wind turbines. As Lomborg rightly points out, that paints a grim portrait of Germany’s energy future:

However, most of Germany’s money was spent, not on research into future technology, but on buying existing inefficient green technology. Three weeks ago, in a report to the German parliament, a group of energy experts delivered a damning indictment of the current subsidies. They said that the policy has had a “very low technology-specific innovation impact in Germany”. Essentially, it is much safer for companies to keep selling more of the old technologies of wind, solar and biomass because these are already getting huge subsidies instead of trying to develop new and better technologies that have similar pay-offs but much higher risk.

Do yourself a favor and read the whole thing. The green movement held Germany up as a paragon of responsible environmental stewardship, one that other countries might model their energy policies after. Unfortunately, the Energiewende has been an unmitigated disaster, but its failure doesn’t diminish its instructional capabilities. Policymakers all over the world ought to take a look at Germany’s shambolic green energy strategy for lessons they can apply at home. We can learn just as much from experiments gone wrong as we can from the ones that work.

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  • Jim__L

    Take the Green subsidy money, reduce it by a factor of 10 (or 100), and put it into R&D instead of propping up markets.

    You’ll get farther.

  • Andrew Allison

    You neglected to point out that the reliance upon Russian natgas caused by this insane policy has made Germany impotent in the current tussle with Putin.

  • S.C. Schwarz

    Does anyone think that Obama, or the democrats in general, have learned the slightest thing from this “lesson?” On the contrary they are trying as hard as they can to do the same here.

    • Dan

      of course they have, you raise the rates which benefits the rich, subsidize the poor and screw the middle

  • gunsmithkat

    The whole premise of “green energy” is a fraud based upon that other great fraud “global warming”. Repeat after me: carbon dioxide is not a poison, it is plant food.

  • rheddles

    The lesson is that when government gets involved to make things better, it rarely does. See also, heath, education, welfare etc.

    • free_agent

      OTOH, one must admit that Social Security and Medicare have achieved their stated goals, and we would be loathe to part with them. And while the traditional “welfare” payments have a lot of related problems, getting rid of them would be obviously disastrous. Similarly, the United States’ involvement in World War II generally made things better. The importance of *competence* in social engineering is at least as great as it is in other areas of technology.

      • rheddles

        I would not agree that Social Security and Medicare, programs that if undertaken in the private sector would lead to prosecution as Ponzi schemes, have achieved their goals. And both will be bankrupt in 20 or so years unless we transfer more income from young productive workers to old unproductive consumers. They cannot go on for ever.

        It is not at all clear that getting rid of traditional welfare payments would be disastrous in the long run. Short term it absolutely would bring a jarring dislocation to a number of dependents, some in that condition unavoidably, some not.

        Gosh, if WWII generally made things better, something with which a lot of mothers and widows might quibble, II can’t wait for WWIII. But one of the reasons for forming the United States was to provide for the common defense, something that has been done if not at a reasonable cost. Mission creep to global hegemon is more debatable.

        Social “engineering” is not technology, it is tyranny.

  • Jacksonian_Libertarian

    Government cannot pick winners or losers in the market place. Every time they try, it ends badly. The only way to reduce the poor Quality, Service, and Price of Government is to limit the Government to only those things, that only a Government can do (Defense, Justice, Foreign Relations), and leave everything else to the free market.

  • free_agent

    One interesting aspect is that the choice of *how* to fund these changes (through an electricity surcharge, exempting large manufacturers) is pretty much independent of *what* to fund. And the funding method was one that was greatly regressive, compared to the obvious alternative of paying for it from the general government budget. So there ought to be a separate analysis of the politics behind that.

  • Joseph Hall

    Congratulations, you’ve earned your paycheck from the Koch Brothers today. The alternative energy field isn’t the future, it’s the here and now. And the fossil fuels industry you’re carrying water for is finished.

    • Fat_Man

      Don’t hold your breath.

      • Jim__L

        Rather, we should ask him to please hold his breath. It’s more difficult to talk that way. Unconsciousness would be an improvement, as well.

        There’s even something in it for him — he emits less CO2 that way!

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