“Either / Or” vs. “All of the above”, Or is Germany’s Energiewende a Better Energy Policy than Obama’s Approach?
In a recent interview with the German business webpage manager magazine online, Arnold Schwarzenegger, the Austrian-born bodybuilder, actor and former governor of California, sharply criticized U.S. energy policy, or, as he put it more pointedly, the lack thereof. Schwarzenegger, a champion of renewable energy during his tenure as governor, says he admires Germany’s determination to switch to (a mostly) renewable energy production in a single generation, while he despises what he sees as a lack of strategy and coordination of energy policy in the U.S.
Schwarzenegger’s endorsement of German energy policy is pretty light on facts. He doesn’t bother to discuss the Energiewende’s issues, which committed readers of this blog may be familiar with. But he is not alone in criticizing the lack of vision and coordination in U.S. energy policy. In fact, both business leaders and environmentalists are united in their criticism of current policies.
Tellingly, Schwarzenegger doesn’t offer any pragmatic proposals. He doesn’t map out which fixes would help the U.S. to become more like Germany in energy terms. He suggests that the German energy transition is better policy altogether because it is a daring plan. While enthusiasm for planning in the realm politics has yielded mixed results in the past, there is an underlying question here which deserves some scrutiny: Is Germany’s approach to energy policy more effective and more politically and economically sustainable (i.e. smarter and cheaper) than Obama’s “all of the above” strategy? I.e., is the Energiewende, which could be dubbed “either/or” in policy terms as it plans to first phase out nuclear and then fossil fuels altogether, better suited to tackle climate change and cheaper than Obama’s approach? Note that this question is asking for actual effects rather than lofty rhetoric and long-term planning objectives.
The question couldn’t be timelier, as with last week’s nominations for the relevant cabinet positions, the outlines of Obama’s second term energy policy became clear. It is marked by three goals: (1) Provide affordable energy for a growing economy and a recovering middle class while (2) reducing the United States dependency on energy imports from unfriendly and/or undemocratic nations and (3) pragmatically tackling climate change. While Germany’s Energiewende may tackle the latter more explicitly, and may render Germany more energy independent in the far future, it is certainly failing on the first goal and moreover relying on Russian imports for about a third of its natural gas.
But let’s have a look at the U.S.: Obama nominated Ernest Moniz, MIT physicist, as energy secretary, and Gina McCarthy to lead the Environmental Protection Agency, where she is currently working as assistant administrator. At MIT, Moniz currently runs the school’s energy initiative, a position in which he oversaw research on pretty much any energy source known to mankind. After the Fukushima nuclear disaster, he wrote an influential article in Foreign Affairs, defending nuclear power on environmental grounds: Nuclear power plants don’t emit any CO2 which is why we need them to tackle climate change. McCarthy may be less outspoken, but her job at the EPA may require precisely that. Coral Davenport reported in the National Journal, that Obama remains quiet about Climate Change for strategic reasons, but his administration is determined to tackle the problem nonetheless: not through legislation, which is currently unthinkable in Washington due to Republican denial of climate science and their determination to kill any relevant bill, but through the regulatory authority of the EPA, and in consultation with industry and other business leaders. She writes:
“Inside Washington, in a warren of back rooms at EPA, dozens of environmental officials are working to craft landmark climate-change regulations that they hope will curb industrial pollution—and withstand a tsunami of legal and political attacks. To help them do it, they’re inviting in heads of the industries and businesses that will soon be forced to implement the rules. Business leaders, although they’re not happy about the coming regulations, are jumping on the opportunity to communicate their concerns and perhaps help shape the rules they’ll have to live by. And the Obama administration hopes that the dialogue will help defuse some of the opposition to come.”
If we accept that Obama will tackle climate change through enhanced regulation by the EPA, two major differences between the U.S. approach and the German approach remain: Nuclear power, obviously, but more importantly shale gas. While Moniz’ nomination was sharply criticized by environmentalists because of his favorable position on fracking (even if DoE does not have jurisdiction over that issue, as some acknowledge), Germany is effectively rendering fracking in the country impossible and is instead using lignite to back-up the intermittent renewable energy production. This negatively affects Germany’s over-all CO2-emissions, because gas burns cleaner than lignite. While the U.S. is reducing its carbon footprint by switching from coal to gas, Germany is struggling to do the same even though it invests heavily in renewable energy.
This means, however, that despite the lofty rhetoric around Germany’s Energiewende – and Mr. Schwarzenegger’s endorsement, the de facto effects of these policies are not that convincing. The U.S. “all-of-the-above” energy policy may be better policy – if it includes serious attempts to tackle climate change. And it may be politically and economically more viable.