Germany “a dangerous role model” for energy transition
Renewable energy sources are booming in Germany as much as anywhere else but the country’s simultaneous rise in coal use and carbon emissions nevertheless make it “a dangerous role model” for countries setting out to emulate the German energy transition, Jan Steckel and Felix Creutzig from the Mercator Research Institute on Global Commons and Climate Change (MCC) write in a guest article for Zeit Online. “Falling costs for renewables alone will not suffice to end coal-fired power production” and therefore bring about the much needed reduction of CO2 emissions, the authors say. This is because capital costs for renewable energy sources, such as risk insurances and interest rates, remain high and outweigh the low running costs for many investors, they argue. “Additional political tools”, such as a tax-based CO2 floor price, a reformed emissions trading system and affordable loan and security schemes are needed to encourage investors, particularly in emerging economies, to put their money into renewables rather than investing in new coal plants, they say.
Read the article in German here.
See the CLEW dossier The energy transition and climate change for background.