German environmental policy under Angela Merkel – Far too little considering the strength of it when she began her chancellorship

Angela Merkel will soon end her political career as Federal Chancellor of Germany after almost 16 years in power – only three months less than record holder Helmut Kohl. She governed first in a coalition with the SPD, then for four years from 2009 onwards with the FDP, and then, since 2013 again with the SPD. The press – and then in a few years probably also the historians – see that the time has come to assess her political activities. The first representative polls, e.g. those conducted by Infratest dimap for the ARD-Deutschlandtrend, show that the majority of Germans look back positively on the last 16 years with Merkel.

An essential part of this assessment will be her environmental policy. When she came to power after seven years of a Red-Green coalition government, the bar for good environmental policy was already very high. At that time, Germany was considered a worldwide pioneer of a courageous and active environmental policy with the climate policy resolutions pushed forward by the Greens in consensus with the SPD. And Merkel herself had already been engaged as environment minister under Kohl from 1994 to 1998. In 1995, she hosted the first UN Climate Change Conference (COP-1) in Berlin, which resulted in a – not yet -binding – agreement to start reducing greenhouse gases internationally. In the subsequent negotiations on the Kyoto Protocol in 1997, Merkel advocated comparatively high reduction targets. As a physicist, she understood the subject better than almost any other politician. Thus, in 2005, with her focus on climate protection, she appeared from a climate policy perspective to be an ideal candidate for the chancellorship from the CDU (even if the CDU as a whole was still far away from taking a courageous stance on environmental policy), continuing active climate policy after her Red-Green predecessor government had already made Germany one of the most environmentally innovative countries in the world and climate protection very popular at home.

But how, in retrospect, can we now assess German environmental policy during the years of her chancellorship? For this, let us look at the different periods of it. During her first period with the SPD as a coalition partner, which was almost equally strong in parliament, the red-green energy package was hardly touched, but to the annoyance of the Greens it was not pushed any further, either. Merkel repeatedly talked about an active climate policy, for example at her first meetings with the newly elected US President Barack Obama in 2009, where both emphasized a common line on the issue of global warming and reactions to it. Thus, she earned purely based on her words the reputation of being a “climate chancellor”. In fact, she liked to talk positively about climate targets at the European and global level. At the G8 summit in Heiligendamm, close to her home, she pushed through the (non-binding) “2-degree target” on climate. In Brussels, as president of the EU Council, she was pushing the Europeans for an ambitious (but also non-binding) climate target by 2020. However, domestically, where she had the power to implement a strong climate policy, the first four years of her chancellorship passed without a single significant initiative. On the contrary, Merkel regularly flip-flopped in front of the economic wing of her own party. And under pressure from the car industry, she even weakened the EU limits for cars that had already been decided. And when in the fall of 2008 the financial crisis spilled over from America into Europe, her focus on climate policy was completely taken away for the rest of this legislative period.

Things went even worse during her second legislative period, when she entered into the coalition with the FDP that her party supporters had so strongly longed for. In October 2010, Merkel’s government decided to “phase out” back into nuclear energy. Under protest from the Red-Green opposition, which rightly did not see nuclear energy as a valid solution to the climate crisis, Merkel’s government extended the operating lives of all active German nuclear power plants again, thus annulling the nuclear consensus of the Red-Green government before. The seven nuclear power plants that went into operation before 1980 were given permission to produce electricity for an additional eight years, and the remaining ten had their operating lives extended by 14 years. This was in line with the FDP’s illusion, which persists to this day, that the high-risk fission of nuclear cores is the appropriate approach to reducing CO2 emissions into the air. However, only six months later, on 11 March 2011, a nuclear disaster occurred in Fukushima, Japan, and Merkel made a complete U-turn from her opportunistic nuclear and energy policy. First, she announced a three-month moratorium on Germany’s oldest nuclear power plants. Then, on 6 June 2011, Merkel’s cabinet decided on the final phase-out of the eight nuclear power plants and a complete phase-out of Germany for nuclear energy by 2022. It seemed that it was only with the disaster of Fukushima that the physicist Angela Merkel finally understood which catastrophes nuclear power plants can trigger in the event of uncontrolled nuclear fissions.

Absurdly, Merkel is today perceived as the person who pushed Germany’s nuclear phase-out. In reality, she acted the other way round: she actually wanted to reverse the nuclear phase-out decided by the previous red-green government and was then quickly taught better by reality. One could almost speak of luck that Merkel was opportunistic enough to take this step against the resistance of conservative party colleagues and the FDP, in order to, in the face of the Japanese nuclear catastrophe, rely on the still strong climate sensitivity of the German voters, who in this respect still stood broadly under the influence of the Red-Green government.

Unfortunately, in the second coalition with the SPD, which continues until the end of her chancellorship, the SPD no longer proved to be the climate party it had been in the Red-Green coalition. For example, Sigmar Gabriel, who had now moved from the environment ministry to the more prestigious economics ministry, failed in his attempt to impose a heavier tax on coal to drive it out of the market, at the hands of the trade unions. As time went by, he turned more and more away from the energy law that his party had drafted with the Greens. In the end, he even lobbied intensively for the German coal industry.

Hardly ever before has a German chancellor left such a big gap between his talk and his concrete policymaking as Merkel has done. For Merkel, a good climate policy was often just an opportunistic topic when the sun was shining. This did have negative consequences for the international climate discussion, where it does not go down well when you announce something with big words and then are unwilling to deliver on it. Thus, she indirectly gave a boost to the very active chronic climate sceptics in the USA.

This then also made it into the international ratings. At the beginning of her chancellorship, Germany was at the very top of the well-known Climate Protection Index (KSI), which looks at the climate policy performance of 57 countries that together are responsible for more than 90 per cent of global greenhouse gas emissions. But after 10 years of Merkel, the country had completely slipped into mediocrity, where it has remained ever since. From being her chancellorship as the leader among the richest countries for a better climate policy to following the policy of most of all countries that falls far short of what is necessary, that is how Merkel’s climate policy record can be summarized. One could also put it more directly: Her climate record is a disaster. In her early years, Merkel was still seen as climate chancellor, but from today’s perspective and a detailed look on her ending chancellorship, this designation could hardly be less accurate. Germany has made next to no progress on climate protection in the last 16 years.

How far society and international politics have come in the meantime, however, not least in view of the clear climate changes in recent years, can be observed almost daily. Today, the international actions clearly tend against the real German trend (however, not against Merkel’s speeches) in favor of a much more dedicated climate policy. Let us take a look at a field that has received somewhat less public attention, the trade in certificates for CO2 emission rights, i.e. for the right of energy companies to emit CO2 into the atmosphere. This was designed to follow a simple market principle already in the 2000s. However, in practice, there was a massive resistance from corporations and business associations against such an emissions price and trade for a long time, whereby they were also quite successful in influencing Merkel. Thus, the free supply of CO2 certificates remained high for a long time and thus the price for them correspondingly low. As late as 2009, German companies received 90 per cent of the certificates free of charge. It was not until 2013 that a turning point was reached, when the EU Commission pushed through a central auction site for all EU countries. For the energy sector, there were now no more free certificates; the protagonists now had to purchase 100 per cent of their emission rights. In the process, more and more sectors were included in the traded emission rights, in which the certificates were no longer simply sold, but (like stocks) auctioned and then traded publicly. Another five years passed before the past surplus certificates were skimmed off and their prices finally rose as desired. For a long time, it was just 5 euros per ton, but then it increased fivefold from 2018 to 2019. In 2019 and 2020, it hovered between 25 and 30 euros, then rose to over 32 euros at the end of 2020, to almost 40 euros in February 2021, to over 50 euros in May 2021 and even to 57.50 euros at the beginning of July. But even this price is still far from covering the actual costs of CO2 emissions. The German Federal Environment Agency estimates the damage at 180 euros per ton of emitted CO2.

Slowly an adjustment of the economy to the necessary steps against climate change is beginning to develop, perhaps not entirely coincidentally at the same time that Merkel is ending her chancellorship. The just released AR6 report of the climate models of the CMIP6 series (first part) points out with unusual clarity how strong and fast the climate crisis is developing. We have overslept here the duration of about 15-20 years to react adequately to this development. It is probably not a complete coincidence that this corresponds exactly to the duration of Merkel’s chancellorship.