healthier, happier and richer

Angela Merkel’s victory in Germany’s election was not unexpected. What was less clear was who her coalition partner would be. The decline in the Social Democrat (SPD) vote and increase in the Free Democrat vote means that it will be the FDP. This party is liberal, in both economic and social senses. It is also very pro-business and in favour of tax cuts and is now arguing for reductions in subsidies.

The departure of the SPD from government means that Germany will reverse the decision to phase out nuclear power. This is good for the climate. In fact, Merkel has described nuclear power as a bridge technology to get us to a fully renewable economy, which is exactly how it should be regarded. However, the FDP is arguing for a reduction in subsidies to renewables, which in Germany have been high and, if they get their way, the “bridge” will be an extremely long one:

“The generous feed-in law for renewable energies, brought in by two SPD-Green governments between 1998 and 2005, is likely to be changed or dropped, said analysts, who do not expect this to kick in before 2011. According to some other analysts, Merkel’s coalition will continue to invest in solar and wind power. Funds for investment in these energy technologies will come from a tax on the profits of the nuclear reactors.“

(See Euractiv: Centre-right victory rewrites Germany’s anti-nuclear agenda.)

In 2006, almost half of Germany’s electricity was from coal (see Germany – climate and energy statistics). The SPD, which has stronger support in coal areas, has usually been seen as more pro-coal than Merkel’s CDU. However, the Chancellor has spoken out strongly in favour of carbon capture and storage. For example, in 2008, on a visit to Oslo, she said that Norway and Germany would co-operate on using the North Sea to store carbon dioxide. “The fact that Norway is counting on CCS technology could be extremely helpful for Germany,” she declared (see “When it comes to climate protection we are of one mind”).

CCS is another essential bridge technology, but must be demonstrated at large scale without delay, and then widely deployed. Therefore, this is a major and immediate test for the new German government. Alan Posener, a columnist for Die Welt newspaper, writes today that we should “look for an emphasis on competitiveness rather than consensus; growth rather than greenery” (see Guardian.co.uk: Angela Merkel, the new Maggie Thatcher). Merkel has shown commitment to climate protection, but coal is important to German energy security. Securing both these objectives together requires a major effort on CCS. Achieving demonstration will certainly require subsidy, and deployment will require regulation. Doing this in coalition with anti-tax, anti-subsidy free marketeers will certainly be challenging.

So – to a large extent – Merkel II will be as green as the FDP allows her to be…