Daily Briefing Is Germany phasing out coal, or merely outsourcing it?

Trying to quit lignite; an EU ultimatum to Venezuela; which way for Huawei? Our Daily Briefing for January 28, 2019.
Quelle: picture alliance
(Source: picture alliance)

At last, we have a date: 2038. That’s the year in which the last German power plant fueled by lignite, the dirtiest form of coal, is slated to go offline. So says a so-called “coal commission” that unveiled its long-awaited report on Saturday. This coal phase-out, moreover, joins another one already ongoing: the gradual exit from nuclear power generation, which will be complete by 2022. This means that Germany at last has a coherent timetable for transitioning to an electricity system that, in theory, relies entirely on renewable sources such as the sun and wind, with backup from (relatively clean) gas.

Andreas has been editor-in-chief of Handelsblatt Today (formerly Handelsblatt Global) since March 2017. His articles can be found here. Quelle: Marko Priske for Handelsblatt
Andreas Kluth

Andreas has been editor-in-chief of Handelsblatt Today (formerly Handelsblatt Global) since March 2017. His articles can be found here.

But there are some problems. The smaller one is domestic. The commissioners, and lots of other people, worry about what the coal exit could do to the regions where the mines will be closing. One cluster is in the former East Germany, in a region called Lausitz (Lusatia), where about 9,000 people work in or around the mines. Another cluster is in the former West, the Rhineland, where some 8,000 are affected. Another 2,500 are scattered in the remaining German coal regions. Those numbers are not huge. But if these people and regions became depressed, they could drift off to the political fringes. So Germany must “buy them out,” and that could be expensive. The preliminary price tag is €40 billion ($45.7 billion) over 20 years.

The bigger problem is international. To some people, this coal phase-out looks like another German Sonderweg. (That’s a pun for the history buffs among you.) The purpose of exiting from coal, of course, is to reduce emissions of carbon dioxide. But what if, instead of doing that, the German phase-out simply leads to increased imports of Polish and Czech electricity generated by coal? According to calculations by the Ifo Institute in Munich, that’s exactly what’s going to happen. As a result, says Karen Pittel, its expert, “there is a danger that German emissions will fall, but emissions in the rest of Europe will rise accordingly. This would not benefit global climate protection at all."

The case of coal, and climate change generally, thus highlights yet again why the EU, whether it has 28 members or 27, must unite, or at least coordinate, to solve the most pressing problems of our time. Segue to geopolitics…

The Caracas split

...where the EU appears, for once, to have gotten its act together. The issue is Venezuela and its standoff for the presidency. On one side is the incumbent, Nicolas Maduro, a corrupt socialist who got himself “re-elected” in a fraudulent ballot, and who is hoping for support from the army. On the other side is Juan Guaido, who has the support of the streets and who has declared himself the rightful president. How is the world reacting?

In a way that is tragically reminiscent of the Cold War, which is to say: the world has split into blocs. In one corner, the United States, along with most of the Western Hemisphere, has sided with Guaido. In the other corner, Russia, China, Cuba, Iran, Syria, and Turkey (let’s call them the “problematic East,” which is not meant to be a geographical term) are supporting Maduro. And the EU?

Quelle: Reuters
(Source: Reuters)

Its members are jointly demanding new and fair elections in Venezuela. And within eight days! So said the foreign ministers of Germany, France, the Netherlands, Spain and others in unison, in coordination with Federica Mogherini (pictured above), the EU’s High Representative for foreign affairs. That doesn’t mean a tin-pot dictator like Maduro will bow to the EU, of course. But it does suggest that for European countries to have any voice in world politics at all, on any issue, they must learn to sing one common song more often.

Barring the backdoor

Such European unity could be harder to find in the upcoming auctions for fifth-generation (5G) wireless spectrum in Europe, as the various countries have to decide whether to allow the Chinese firm Huawei to be an equipment supplier. There are concerns that Huawei, founded by a former officer in the People’s Liberation Army, could build snazzy “backdoors” into the new telecom systems, which China could use for spying. Moreover, the Trump administration is on a global campaign to completely shut out Huawei from Western 5G markets. It has hinted to Poland that it might withdraw US troops if Warsaw works with Huawei. It is putting pressure on Germany, too.

Quelle: picture alliance
(Source: picture alliance)

There are indeed good reasons to be very suspicious of Huawei, and other Chinese technology firms. But an outright ban could turn out to be counterproductive. In this short analysis, I try to take a slightly more nuanced view. Either way, the decision has to made within months, and will then be with us for years, if not decades.

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