Merkel must move Beyond Coal to ensure German competitiveness

By Nigel Topping, CEO of We Mean Business

A challenge has been issued for German Chancellor Angela Merkel at COP23, and the stakes couldn’t be higher. At risk are Germany’s industrial competitiveness, the powerhouse of its growing economy, and its reputation as a leader in the global fight against climate change.  

Former New York mayor Michael Bloomberg called on Merkel to finally tackle its rising emissions and formally set a date for phasing out its coal-fired power, when he spoke at the ‘Moving Beyond Coal After Paris’ event at the UN Climate Conference.

It’s critical for Germany to be leading the move away from coal power because of its influence in the European Union, Bloomberg said. He highlighted the global urgency to move away from coal use in the power sector, pointing out that air pollution from burning coal kills more than 800,000 people each year.

“We aren’t going to accept that,” he said.

In 2016, over 40% of Germany’s power was from coal, with 23% coming from the more polluting lignite, or ‘brown coal’, and 17% from hard thermal coal.

Bloomberg has announced funding of $50 million to aid the global shift away from coal worldwide, to tackle air pollution and climate change. This is in addition to previously announced funding in excess of $100 million to the Beyond Coal movement in the US.

The sentiment was echoed by the panel, with Lord Adair Turner, Chair of the Energy Transitions Commission, adding that without a planned phase out Germany would not remain a credible force within the Paris Agreement.  

He said that to have any chance of limiting the global temperature rise to below 2°C, developed countries such as Germany will have to exit coal use for power within the next five years.  

Turner said that in addition to a fixed end date for coal use in Germany, the EU should ensure the rapid decline of coal use across the region by implementing a minimum carbon price.

A recent report by CDP shows that while power utilities are increasingly adopting internal carbon prices, these are not incentivizing companies enough to undergo the rapid transformation needed to achieve a below 2°C scenario.

Europe has nearly 300 coal plants in operation and almost 100 more planned, according to data from Beyond Coal. In 2015, 18% of the EU’s greenhouse gas emissions came from just 284 coal power plants.

Last week, thousands of people set the scene ahead of the climate talks in Bonn by taking to the streets to call for the phasing out of coal as a source of power.

Meanwhile, Germany’s inability to effectively decarbonize its automotive sector is also risking one of the country’s greatest assets – its engineering talent.

Germany has not followed the lead set by countries such as the UK and France to set a fixed date for banning the sale of petrol and diesel cars. By not providing that clear policy signal, Germany could fail to engage the full force of the country’s clear skill for innovation.  

And it appears those policy signals are much needed for the country’s automakers to accelerate their transition to the required speed. Even the EU’s unambitious plans to force automakers to cut vehicle carbon dioxide emissions by 30 percent by 2030 are being met with resistance from the German auto industry’s lobby groups.

Incrementally reducing diesel carbon emissions is no way to use Germany’s engineering talent. Only by fully embracing the switch to clean energy and electric vehicles can Germany remain the engineering powerhouse and help to build the low-carbon economy of the future.

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