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Two countries, one planet Not long ago Germany’s green energy transition led the world. So how did Britain come to leave Europe’s other old coal power lagging behind? Adam Tooze In the UK there is now considerable euphoria around decarbonisation. This is, to say the least, a surprise. In the 19th century Britain led the world into the era of fossil fuels, and as recently as 10 years ago it lagged far behind in the energy transition compared to other large European countries. Way back in the 1970s, France had gone the whole hog for nuclear. Under Gerhard Schröder’s Red-Green government in the late 1990s and early 2000s, Germany had pioneered solar and wind and ambitious energy efficiency standards for housing. As the 21st century began, Britain was still an island of coal surrounded by seas of oil and gas. Yet today, the UK’s per capita CO2 emissions are almost 40 per cent lower than Germany’s, the country that “progressive” Britons almost reflexively assume does everything “better than us.” The UK is a world leader in offshore wind power, one of the most promising sources of renewable energy. The UK parliament was one of the first to commit to net zero carbon emissions by 2050. The Labour Party went into the December election espousing a Green New Deal more radical than anything envisioned by the German Greens. And though the Labour conference resolution of zero emissions by 2030 may be unrealistic, the end of coal-fired power generation in the UK is in sight— years ahead of Germany. Energy experts boast about the clear-headed design of Britain’s 2013 electricity market reform, which established a price floor for carbon and efficient auctions for renewable capacity. This contrasts with the chronic muddle in German energy policy. But such technocratic self-congratulation is at risk of underplaying accidents of geology and geography, the same ones that made the UK into a fossil fuel giant in the first place. They also underestimate the legacy of history—specifically, Britain’s painful economic and social restructuring in the 1980s and 90s. This weakened the established national interests that defended coal, and created an energy sector dominated by transnational corporations highly responsive to policy incentives and market signals. This has enabled some quick wins, even if its ability to facilitate the deep decarbonisation required ahead remains to be seen. Old kings’ coal In the last century Britain and Germany were the pre-eminent coal powers of Europe. Coal, the most poisonous of fuels for the climate, was the foundation of their national economies and their international power. It was not by accident that the coal industry was nationalised by the 1945 Labour government, or that France’s effort to corral Germany’s power began with the European Coal and Steel Community. Mineworkers were a power in the land. In Germany they led the demand for workers on boards. In 1974 when Ted Heath asked the electorate whether it was Downing Street or the miners who ruled Britain, the voters showed him the door. But when the Tories returned to power in 1979, breaking the nexus between energy and labour was a priority for the right. The path to privatisation and liberalisation, which soon became the norm in Europe, was first bulldozed in Britain through the defeat of the mighty National Union of Mineworkers (NUM). By September 2019, as a left-wing Labour Party conference adopted the Green New Deal and cheered the end of coal-fired power generation, the epic strike of 1984-5 had been consigned to another age. Nowhere else in Europe was the rollback of industrial labour more dramatic. The contrast with Germany is stark. Within the last year, Chancellor Angela Merkel has been personally involved in month-long negotiations over the final phasing out of coal, talks that involved not only the electricity utilities but also mining unions and coal communities. The shareholders in the lignite burning power stations of western Germany—some of the most polluting in Europe—include local government. In the eastern coalfields the mainstream parties of Germany © SHUTTERSTOCK REX
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JANUARY FEBRUARY JANUARY FEBRUARY <2% of the UK’s electricity was generated by coal in the first half of 2019 fear the upstart, hard-right AfD, which is fashioning itself as the voice of climate scepticism. It is this dense web of interests that decided that Germany should not exit coal before 2038, and with a pot of €40bn to cushion the transition. In Britain, the breaking of the NUM opened the power sector to radical change: the tight connection between the coal fields and the power generators was prised apart. It then fell to natural gas flowing from the North Sea to do the rest. Up to the 1990s gas was not widely burned to generate electricity, but then a new generation of gas turbines derived from aircraft engines transformed things. These compact, fast-revving power units could be switched on and off at short notice to meet the demands of the new spot market in power. The “dash for gas” ended the monopoly of “Germany’s bürgerliche “Germany’s bürgerliche Energiewende can be translated either as a citizens’ energy transition—or a bourgeois one” more-polluting coal in electricity generation. In the late 1990s New Labour somewhat cushioned the blow to coal by slowing the transition to gas. But there was no retreat from the path of deindustrialised economic growth laid out in the 1980s. And in effect, the 2003 White Paper on “creating a low carbon economy” proposed walking the country further down that path. Soot and sandals Today the headline emissions figures flatter the UK. It has the largest gap between CO2 produced at home and emissions consumed, importing many manufactured goods from smokebelching China. In Germany, by contrast, preserving domestic manufacturing has been at the heart of policy, and means it has greater needs for power. The question has been, and continues to be, how those needs can be met. And in answering it, Berlin has inconsistently balanced the dirty demands of industry with an alternative green vision. Attached to coal, Germany’s dash for gas in the 1990s was less dramatic. But in the 1970s, Germany— like Britain—had made a major investment in nuclear power. However, the result was a spectacular mobilisation of environmental protest leading to the formation of the German Green Party. When the Red-Green coalition took office in 1998, its top priority was to negotiate a cross-party consensus to exit nuclear power generation. Merkel’s famous U-turn on nuclear power in 2011 after the Japanese nuclear disaster at Fukushima merely sped up the rate of decommissioning, bringing it forward to 2022. The trump card in the Red-Green government’s anti-nuclear energy policy was renewables. The aim was to replace the 30 per cent of electricity generated by nuclear by 2020. To do so, in 2000 the Red-Greens amended the Erneuerbare-Energien Gesetz (Renewable Energy Sources Act) to offer a complex system of subsidised feed-in rates for different classes of renewables, making adventurous technologies into a safe investment. The effect was dramatic. Germany launched a bottom-up, small-scale energy revolution. Not for nothing is it known as the bürgerliche Energiewende, which, with telling ambiguity, can be translated either as a citizens’ energy transition—or a bourgeois one. Small businesses and property owners across Germany seized the opportunity to add solar panels and small-scale windmills. They supercharged Germany’s rise as an industrial leader in solar and wind power, a sector that at its peak in 2012 employed just short of 400,000 people. They also created a large political constituency for the energy transition, which after 2005 brought Merkel’s CDU on board as well. German subsidies acted as a global industrial policy for solar and onshore wind, attracting producers from around the world, but above all China, whose solar manufacturers soon prevailed in a global price war. But Germany still has a prominent role in manufacturing equipment for solar cells and sophisticated wind turbines. So successful was the model that Italy and Spain both adopted feed-in subsidy models, as did Britain in 2010, when it sparked a huge surge in smallscale solar energy installation. But despite its success, Germany’s green energy policy soon found itself denounced as unsustainable. Its Achilles’ heel was its funding model. To avoid raising taxes, which would have collided with EU law on subsidies, the fixed feed-in prices were financed out of a levy on electricity bills. To make matters worse, to protect competitiveness—the be-all-and-end-all of German economic policy—heavy industrial power users were exempt from that levy. The result was a regressive energy tax that fell heavily on poorer households. Meanwhile, well-to-do homeowners and small businesses were subsidised to buy Chinese solar panels and turbines, which on bright and windy days flooded the wholesale market with renewable power, thereby reducing the bills for the big industrial users. But in the labyrinthine world of energy pricing things are rarely what they seem. Though the green levy made an obvious target for resentment, profiteering by incumbent generators was at least as

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Two countries,

one planet

Not long ago Germany’s green energy transition led the world. So how did Britain come to leave Europe’s other old coal power lagging behind?

Adam Tooze

In the UK there is now considerable euphoria around decarbonisation. This is, to say the least, a surprise. In the 19th century Britain led the world into the era of fossil fuels, and as recently as 10 years ago it lagged far behind in the energy transition compared to other large European countries. Way back in the 1970s, France had gone the whole hog for nuclear. Under Gerhard Schröder’s Red-Green government in the late 1990s and early 2000s, Germany had pioneered solar and wind and ambitious energy efficiency standards for housing. As the 21st century began, Britain was still an island of coal surrounded by seas of oil and gas.

Yet today, the UK’s per capita CO2 emissions are almost 40 per cent lower than Germany’s, the country that “progressive” Britons almost reflexively assume does everything “better than us.” The UK is a world leader in offshore wind power, one of the most promising sources of renewable energy. The UK parliament was one of the first to commit to net zero carbon emissions by 2050. The Labour Party went into the December election espousing a Green New Deal more radical than anything envisioned by the German Greens. And though the Labour conference resolution of zero emissions by 2030 may be unrealistic, the end of coal-fired power generation in the UK is in sight— years ahead of Germany.

Energy experts boast about the clear-headed design of Britain’s 2013 electricity market reform, which established a price floor for carbon and efficient auctions for renewable capacity. This contrasts with the chronic muddle in German energy policy. But such technocratic self-congratulation is at risk of underplaying accidents of geology and geography, the same ones that made the UK into a fossil fuel giant in the first place. They also underestimate the legacy of history—specifically, Britain’s painful economic and social restructuring in the 1980s and 90s. This weakened the established national interests that defended coal, and created an energy sector dominated by transnational corporations highly responsive to policy incentives and market signals. This has enabled some quick wins, even if its ability to facilitate the deep decarbonisation required ahead remains to be seen.

Old kings’ coal

In the last century Britain and Germany were the pre-eminent coal powers of Europe. Coal, the most poisonous of fuels for the climate, was the foundation of their national economies and their international power. It was not by accident that the coal industry was nationalised by the 1945 Labour government, or that France’s effort to corral Germany’s power began with the European Coal and Steel Community. Mineworkers were a power in the land. In Germany they led the demand for workers on boards. In 1974 when Ted Heath asked the electorate whether it was Downing Street or the miners who ruled Britain, the voters showed him the door.

But when the Tories returned to power in 1979, breaking the nexus between energy and labour was a priority for the right. The path to privatisation and liberalisation, which soon became the norm in Europe, was first bulldozed in Britain through the defeat of the mighty National Union of Mineworkers (NUM). By September 2019, as a left-wing Labour Party conference adopted the Green New Deal and cheered the end of coal-fired power generation, the epic strike of 1984-5 had been consigned to another age. Nowhere else in Europe was the rollback of industrial labour more dramatic.

The contrast with Germany is stark. Within the last year, Chancellor Angela Merkel has been personally involved in month-long negotiations over the final phasing out of coal, talks that involved not only the electricity utilities but also mining unions and coal communities. The shareholders in the lignite burning power stations of western Germany—some of the most polluting in Europe—include local government. In the eastern coalfields the mainstream parties of Germany ©

SHUTTERSTOCK

REX

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