Angela Merkel’s CDU (with their Bavarian sidekicks, the CSU) and the free-market FDP - the main winner of Germany’s federal elections - will form the next governing coalition. This is almost certainly bad news for German climate change policy - both domestically and on the international stage - but the policy setbacks in this area will arguably be more limited than what the FDP would prefer. Looking at international negotiations and energy policy as examples will show why.

1) International negotiations

Within the Grand Coalition that governed Germany for the past 4 years, Germany’s stance at international negotiations was never a hotly contested political terrain, for several reasons. Because Germany started important environmental measures earlier than other countries (and cleverly pushed for CO² emission-reduction targets to be based on 1990, before the heavily eastern German industry was mostly shut down) being progressive in contrast to international negotiating partners was never particularly hard, because it did not necessitate painful domestic policy measures. While this is changing to an extent, Germany, and indeed Europe, are not the crucial barriers to a post-Kyoto. And Angela Merkel, a former environment minister and early believer in the science behind climate change is unlikely to give up control over negotiations to an extent that would endanger a progressive German position.

Nevertheless, another danger is more real. Sigmar Gabriel (SPD), German’s environment minister had four years in which to build relationships with other negotiators and governments, get a feeling for the limits of other countries’ room for political maneouvre and learn the tricks of the trade. Given the lack of high-profile candidates in the area of environmental and climate change policy within the FDP and CDU/CSU, Gabriel successor will almost certainly struggle to make a similar impression. And, in addition, she or he will only have had three weeks at the most to get their head into an issue that is among the most complicated and tricky of any ever attempted to be dealt with by international negotiations.

2) Energy policy

While it is fair to say that climate change policy did not feature in the run-up to the federal elections at all, this is not true for energy policy. A long string of lies about nuclear energy was masterfully publicised by SPD environment minister Sigmar Gabriel. They included cover-ups about leaks in the site of Germany’s proposed site for the long-term storage of nuclear energy, high costs for cleaning up an alternative site borne by the tax-payer, the existance (and subsequent denial of this fact) of a strategy paper commissioned by an energy major and outlining communication strategies to promote nuclear energy in the election campaign (conclusion: keep quiet and point out nuclear energy’s green credentials). In addition to further accidents in a notorious north-German nuclear power plant and the emotive nature of many Germans’ thinking about nuclear energy made the CDU/CSUs and FDPs election pledge of ‘exiting-the-exit’ of nuclear energy (Ausstieg vom Ausstieg) one of the few clear dividing lines in an otherwise uneventful election campaign.

The high percentage of Germans who want to exit nuclear energy doesn’t seem to have helped the SPD very much. Nor is there a clear-cut impact of nuclear policy on climate change. Nuclear energy is clean (with regards to CO² emissions), and not extending the life of nuclear power plants would almost certainly have meant building more coal powered ones, even at the breakneck speed of German renewables growth. While there is a valid argument that being able to keep written-off nuclear plants running will decrease the pressure for large energy companies to invest in renewables, this would have been equally true for investment in coal that is already happening. If the new government sticks to the CDUs election pledges of not building new nuclear and taxing nuclear providers half the extra profits they make from extending their lifetime to invest this money in renewable energy, then this may not actually be bad news for preventing climate change. Yet this is doubtful. The traditional energy companies are not friends of renewables, and their deep pockets and lobbying prowess may mean they will push further, for government-subsidised new nuclear power stations and reductions in funding for renewables. If the market knows best, skepticism may prevail. On Monday morning after the election the shares of EON and RWE jumped, while those of renewable technology producers fell sharply…

Proponents of Carbon-Capture-and-Storage (CCS) have long hailed the technology as the silver bullet that will enable the world to both fight climate change and keep using coal reserves. In Germany, the debate about the merits and pitfalls of this approach has once again surfaced. It highlights three key problems with using CCS to solve the climate crisis. Ordered from least to most damaging to the proponents of CCS, they can be summarised as: 1) The technological challenges in bringing the technology to large-scale applicability and the amount of money needed to reach this point. 2) The economic uncertainties over the competitiveness of CCS-generated energy vis-a-vis other forms of energy. 3) The opportunity costs of investing in CCS given the proven potential and fast growth rates of other renewable energy sources.

1) The technological challenges in bringing the technology to large-scale applicability and the amount of money needed to reach this point.

To deploy CCS technologies to a degree necessary to substantially reduce CO² emissions from coal-based energy generation will require not the creation of an infrastructure similar in scale and technological complexity to that of the oil- and gas-supply. Furthermore, it will require sustained investments by governments and energy producers in fitting and possibly retro-fitting existing plants. This combination of the costliness of the infrastructure necessary and the technological challenges involved means that the technology will be deployed too late, when the peak of coal-based energy production has already been reached, argues Richard Heinberg, from the Post Carbon Institute.

2) The economic uncertainties over the competitiveness of CCS-generated energy vis-a-vis other forms of energy

Caused in part by uncertainties about the costs and feasibility of CCS, in part by uncertainties about future supplies and cost changes of other renewables, there is considerable uncertainty about the economic prospects of CCS-generated energy. Richard Heinberg argues that deploying CCS will lead to strong increases in electricity prices, because a) CCS will be deployed after coal production has peaked, and b) because the technology lowers the efficiency of energy production.

Long-term considerations aside, in Germany doubts about the economics of CCS have appeared from unusual quarters. Johannes Lambertz, head of RWE Power, stated that with increasing construction costs and the potential costs for CCS the economic case for constructing coal-fired power stations was hard if to make.

3) The opportunity costs of investing in CCS given the proven potential and fast growth rates of other renewable energy sources.

While the points made above merely express scepticism about the chances of successfully fighting climate change using CCS technology, they don’t seem to justify to not at least try (we should try everything, after all, if we take climate change seriously). But this misses the crucial point of the case against CCS - opportunity costs: The cost of an alternative that must be forgone in order to pursue a certain action. The question is, would investment in other forms of renewable energy or measures not make more out of public and private investment?

Axel Berg, deputy energy spokesman of the SPD-Fraktion, is one making this argument. He argues that while using CCS sustains an outdated mode of energy creation based on large utilities running large power plants, the technology cannot easily be exported, especially not to developing countries, and shift attention away from policies focusing on energy efficiency measures and new renewables technologies, the only sustainable solutions to climate change.

Overall, the debate around CCS will continue, and it is likely that it will play at least some part in policies addressing climate change. But there are serious problems linked with its use - it is not the silver bullet.

As the G20 and UNFCCC meetings draw closer, France’s Green Plan (le Grenelle Environment Round Table) and a couple recent additions are worth a quick review. So a few things:
• The Oceans Initiative (Le Grenelle de la Mer) was originally announced in February 2009, but major action has just started in the past weeks.
• the French government will launch in April an eco loan of up to 30,000€ with no interest rate to increase the use of thermal renewable energy sources and of energy conservation.

Le Grenelle is a rare example of federal-level government-led effort to connect the State, unions, employers, NGOs, and local authorities in a rigorous process to determine approaches to climate change.

The “Grenelle Environnement,” officially launched on 6 July 2007, and combines the state and civil society in order to define new actions for sustainable development in France (through 2012). Action plans were developed around the themes of: climate change and energy, biodiversity and natural resources, health and the environment, production and consumption of ecological democracy, development patterns and environmental employment and competitiveness.

With regards to Le Grenelle de la Mer, four working groups have been formed this month around the themes of:
* Sustainable fishing
* Employment in the marine sector
* Coastal development
* Governance at the local and global level

The working groups will produce a road map before the summer, which will then be submitted to an inter-ministerial committee. The project is viewing ocean and fishing issues as strongly tied to changes in climate in the near and long-term futures.

According to the latest report on fisheries published by the FAO in March, around 28 percent of world fish stocks are over-fished.
One big unanswered question is how France will reconcile the need for sustainable fishing policies with the fishing subsidies, which cost France 27 billion Euros per year, according to calculations by Daniel Pauly, head of the Fisheries Center of the University of British Colombia.

Let’s shift gears to the Grenelle Housing Initiative, which is gearing up for action…

The energy and environment Minister, Jean-Louis Borloo expects heavy energy –efficient renovations to go above 400,000 per year, to be compared to the current 40,000. He goes on to say that each construction project built prior to 1990 has to be renovated. This represents 27 million housings, including 15 individual houses.

People willing to benefit from these loans have to choose two or three options among the following:

* Insulation of the roof ;
* Insulation of the walls ;
* Replacement of doors and windows ;
* Installation of a more efficient heating system ;
* Installation of a water heating or housing heating system with renewables.

By choosing two, one can benefit from an eco loan of 20,000€; choosing three, one can get 30,000€. Households will have from ten to fifteen years to payback these loans.

To Mr. Borloo, such a scheme would allow households to cut by 70 to 80 percent their heating bills.

Sounds like Frnace has some good ideas to share at the upcoming international climate change meetings.

President Obama’s economic stimulus plan will be debated by the Senate this week, after a House version of the plan passed last Wednesday, largely along party lines (244 to 188—see the roll call here). Embedded in the House version’s $48.9 billion allotment for energy and water programs—programs that have seen their budgets stagnate or dwindle over the last 8 years—is $18.5 billion provided to the Department of Energy for energy efficiency and renewable energy programs, as well as $8 billion to cover subsidy costs of federal load guarantees for renewable energy systems and electric transmission projects and $4.5 billion to modernize the nation’s electricity grid.

The budget authority covers the 2009-2019 period, with the expectation that most of the funds provided will be spent within the next seven years, as programs and institutions take time to scale up their efforts to match their much expanded budgets.

The investment in renewables, an increase of nearly 10 times the 2009 budget of approximately $1.9bn, comes as a more than symbolic gesture that the new president sees green development not only in the context of short-term economic recovery (though a $4.5 billion investment in the Army Corps of Engineers is reflectives of President Obama’s campaign promise to create green collar jobs) but as an immediate step towards building a low-carbon infrastructure.

Investment into renewable energy R&D has declined steadily in the United States since its post-oil crisis peak in 1973. As public investments fell, the private sector has largely followed suit, leading to a steady decline in American renewable energy innovation, as evidenced by a drop in patents in key renewable sectors.

But President Obama has pledged to double renewable energy capacity in the next three years, and if all goes well in the Senate this week, it appears he will have the funds to back it up. But is doubling the capacity of a sector making up just 6% of the total US energy consumption sufficient?

Obviously, scaling up will take time. Public funding renewable energy R&D now fulfils an essential role in providing financial incentives for technological breakthroughs that are still too risky for private investment. But there are technologies that are market ready, or nearly so, now that if implemented at a large scale could go a long way towards creating a low-carbon economy.

The Outlook

The verdant hues of President Obama’s stimulus plan are a commendable break from recent history and a very encouraging sign that the US is serious about a clean energy future. But as this is an opportunity to define the starting point of what is perhaps a new era of American energy, so it is one that will set the trajectory for a long time coming. To fulfill both promise and need for a truly green economy, the US must match its investment with policy to usher its fledging renewables sector into the market for energy quickly, efficiently, and comprehensively.